Amazon’s strategy to monetize its Alexa-enabled devices has not yielded positive results, reportedly costing the company billions. According to the Wall Street Journal, internal documents reveal that Amazon lost over $25 billion from its Echo, Kindle, and other devices between 2017 and 2021. Despite having hundreds of millions of customers using these devices, it seems that many utilize their Alexa-enabled Echo speakers primarily for basic functions like setting alarms, rather than making purchases through Amazon.
A former senior Amazon employee expressed concerns, stating, “We worried we’ve hired 10,000 people and we’ve built a smart timer.” 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 involved in this project have doubts about its potential effectiveness.
An Amazon spokesperson defended the company’s approach, stating, “We’re focused on the value we create when customers use our services, not just when they buy our devices.” They emphasized that the Devices & Services organization has successfully built numerous profitable businesses for Amazon and is poised to continue this trend.
Meanwhile, Amazon’s new AI-powered version of Alexa, which was showcased in September, is reportedly still in development and may not be ready soon, according to former employees. The company lacks sufficient data and access to necessary chips for operating the large language model driving the new assistant. Additionally, Amazon has reportedly shifted its focus from AI-enhanced Alexa to expanding generative AI capabilities in its cloud computing division, Amazon Web Services.
In response to these claims, Amazon asserted that its former employees are misinformed regarding its AI initiatives. The tech giant maintains that its Artificial General Intelligence team has access to in-house Trainium chips and Nvidia GPUs, reiterating that its objective remains to build “the world’s best personal assistant.”