Amazon’s attempts to monetize its Alexa-enabled devices have reportedly resulted in significant financial losses, totaling over $25 billion from 2017 to 2021, according to internal documents and sources familiar with the situation. While the company boasts hundreds of millions of customers using its devices, the primary functions of Alexa-enabled Echo speakers appear to revolve around setting alarms and utilizing free apps, rather than facilitating shopping on 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 reportedly exploring solutions, including a new paid version of its voice assistant. However, some engineers working on this initiative have expressed skepticism about its potential impact.
An Amazon spokesperson emphasized the company’s focus on the value created when customers use their services, rather than solely on device sales. They noted that their Devices & Services division has established profitable ventures and is positioned for continued success.
In parallel, Amazon’s latest AI-powered version of Alexa, revealed in September, is allegedly not fully ready for deployment, as former employees indicate a lack of necessary data and access to the required chips for the new large language model. Additionally, Amazon has reportedly shifted its priorities to emphasize generative AI for its cloud computing arm, Amazon Web Services.
In response, Amazon challenged the accuracy of claims from former employees, asserting that the Amazon Artificial General Intelligence team has access to essential in-house chips and Nvidia GPUs. The company’s goal for Alexa remains focused on developing the world’s leading personal assistant.