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I can't find any announcement from Amazon. Really hope that this is just a wild speculation. On the other hand, I've been reading some books on Manning liveBook, it's really nice to be able to interact with other readers in the comment section on the same content, and sometimes the author would chime in too. But of course only Manning books are available there.
Mine works fine.

If Amazon discontinues, I'll want a major refund. That's how I read eBooks. Without a big screen, textbooks are useless.

If people purchased books with the expectation they would work on Cloud Reader, wouldn't Amazon have to provide some sort of refund? Amazon cannot suddenly force people to buy a Kindle device to access books they've already paid for.
News like this is why I don't support services that don't allow downloading a non-DRM copy of the data I would purchase. No Kindle, no Spotify, no Netflix.
You’re not buying content on Spotify and netflix.

This is a bad comparison to kindle where you actually purchase content.

If you're on a platform where Kindle Reader app is available, is there any reason to use the Kindle Cloud Reader?

I guess there are some people who buy Kindle books but whose main OS is ChromeOS (like the screenshot in the article) or desktop Linux. What's the solution for them? Use ARC (Android Runtime for Chrome)?

Downtime at work where you don’t have local admin and an actual Kindle or paper book is too obvious.
Mine works fine too (Windows/Chrome).