"Last November, a report from The Wall Street Journal revealed that Amazon CEO Andy Jassy heavily scrutinized the company’s Alexa sector, as its operating losses exceeded $5 million in recent years."
"The company also announced layoffs affecting 18,000 employees earlier this year, with Amazon hardware chief Dave Limp telling CNBC that 2,000 of those cuts affected workers in his division, which is in charge of Alexa and Echo products."
It turns out that the "killer app" for Alexa / Echo devices is being a voice-activated kitchen timer and playing music. Some users also use it as a voice-activated controller for smart home devices, but they are only a small fraction of users. This means that Alexa costs more to operate than it brings in in revenue, so they are looking to cut costs in any way they can.
Hooking up ChatGPT or similarly powered backend seems like a next step to stay competitive, but that will cost even more to operate. Expect to see a smarter AI-powered Alexa available for a subscription that gives better answers and has more skills.