Amazon's AI coding assistant Q lags rivals in revenue, internal data shows

In a striking revelation, Amazon's coding assistant, Q Developer, has reportedly struggled to keep pace with its rivals in terms of revenue during its inaugural year. As detailed in an internal document obtained by Business Insider, the projected annual recurring revenue (ARR) for Q Developer stands at $16.3 million as of late April. This figure is derived from an estimated weekly revenue of approximately $317,000 and a total of $1.25 million over the past four weeks. While Q Developer's growth may have seemed promising initially, industry experts like Jason Lemkin, managing director of SaaStr Fund, believe it pales in comparison to the rapid advancements seen in the AI sector. For example, Anysphere's Cursor coding tool achieved an impressive ARR of over $500 million in June, having reached $100 million just months prior. Similarly, Windsurf, another AI coding assistant, reported an ARR of $82 million within its first year, while emerging startups like Gamma and Higgsfield reached $50 million in ARR in under 12 months. In light of these developments, Lemkin commented, "It's not as jaw-dropping as it used to be," referring to Q Developer's performance. He noted that Amazon Web Services (AWS) appears to be lagging in the AI race. In response, an Amazon spokesperson emphasized that the company is committed to rapid innovation for Q, highlighting users such as ADP, Deloitte, and Japan Research Institute. The spokesperson also mentioned a nine-fold increase in daily usage of Q Developer per person this year. Despite its potential, Q Developer has yet to achieve significant recognition, prompting Amazon to consider refining the Q branding. Internal discussions reveal that AWS is perceived as lacking a solid reputation for AI-powered developer tools, as generative AI advancements caught the company off guard, resulting in hastily developed products. Nevertheless, Amazon remains optimistic about Q Developer's prospects, pointing to positive customer feedback and its status as the most widely used internal tool at the company. The spokesperson stated, "We are seeing more and more customers, from startups to large enterprises, adopt Q Developer to enhance productivity." With projections from Gartner indicating that 40% of new business software will utilize AI coding tools by 2028, Amazon recognizes the importance of this market. However, internal communications suggest that employees have shown a preference for external products like Cursor over Q Developer, with feedback pointing to Cursor's ability to implement changes rapidly compared to Q Developer's slower pace. Amazon CEO Andy Jassy has previously acknowledged Q Developer's significant impact, claiming it has saved the company an estimated $260 million in efficiency gains. However, during a recent earnings call, he also highlighted Cursor as a key player in the evolving landscape of coding agents, underscoring the competitive pressure facing Amazon's AI initiatives.