Amazon’s efforts to monetize its Alexa-enabled devices have reportedly failed, resulting in significant financial losses for the company. According to a Wall Street Journal report, the online retail giant lost more than $25 billion from its Echo, Kindle, and other devices between 2017 and 2021, based on internal documents and insights from unnamed sources. Although Amazon boasts hundreds of millions of customers using its devices, the Alexa-enabled Echo speakers are primarily used for functions like setting alarms rather than shopping on Amazon.
A former senior Amazon employee remarked, “We worried we’ve hired 10,000 people and we’ve built a smart timer,” highlighting concerns about the product’s practicality.
In response to these challenges, Amazon CEO Andy Jassy is seeking solutions, including the introduction of a paid version of its voice assistant. However, some engineers developing this paid version have expressed skepticism about its potential to drive change.
An Amazon spokesperson emphasized the company’s focus on the value created through its services rather than just device sales, stating that the Devices & Services organization has established various profitable ventures that are well-placed for future success.
Additionally, Amazon’s new AI-powered Alexa, introduced in a September demonstration, is reportedly not fully developed, as per former employees. They indicated that the company lacks sufficient data and the necessary hardware to implement the large language model (LLM) for the updated assistant. Furthermore, Amazon has reportedly shifted its focus away from developing AI for Alexa to prioritizing generative AI advancements for its cloud computing division, Amazon Web Services.
In response to these claims, Amazon countered that its former employees are misinformed about the current state of Alexa’s AI initiatives. The company asserts that its Artificial General Intelligence team has access to both in-house Trainium chips and Nvidia GPUs, maintaining its goal to create the world’s leading personal assistant.