Amazon’s efforts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, with estimates indicating a loss of over $25 billion between 2017 and 2021. This information is drawn from internal documents and sources familiar with the situation, as reported by the Wall Street Journal.
Despite attracting hundreds of millions of customers to its devices, many users seem to utilize the Alexa-enabled Echo speakers primarily for basic tasks like setting alarms rather than for shopping. A former senior employee noted concerns about the effectiveness of the hiring spree, which brought on 10,000 new employees, stating that they felt more like they had created a high-tech timer than a successful product.
In response to these challenges, Amazon CEO Andy Jassy is reportedly exploring the introduction of a paid version of Alexa. However, some engineers involved in the project are skeptical about its potential impact.
An Amazon spokesperson emphasized that the company focuses on the value created for customers beyond device purchases, asserting that its Devices & Services division has established several profitable ventures and is positioned for future success.
Additionally, Amazon’s new AI-powered version of Alexa, which was showcased in September, appears to be far from completion, as critics highlight issues with data availability and access to the necessary technology. There are concerns that the company is shifting its focus from developing the AI-powered Alexa to enhancing generative AI capabilities within its cloud computing branch, Amazon Web Services.
Amazon rebuffed claims from former employees, insisting that they are misinformed regarding its Alexa AI initiatives, and reiterated that its Artificial General Intelligence team has adequate access to advanced computing resources. The company maintains its commitment to developing what it aims to be the leading personal assistant in the market.