Amazon is overhauling its AI strategy, winding down many in-house models, reorganizing teams, and focusing engineers on a new strategy to compete at the frontier, according to people familiar with the matter.
The changes follow layoffs in Amazon’s Artificial General Intelligence, or AGI, organization last week and the shutdown of AGI Lab, a research group it created in 2024 after hiring most of the team behind AI startup Adept.
The restructuring suggests Amazon is refocusing its AI strategy, concentrating engineering talent and scarce computing resources on its highest priorities.
Amazon has begun deprecating most of its in-house flagship Nova models, including the high-end Premier and Omni models, Reel video-generation model, and Canvas image-generation model, according to people familiar with the matter.
Some Amazon employees described these models as operating in “KTLO,” short for “keep the lights on,” an engineering term for software that remains supported for existing customers but is no longer a major development priority.
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Resources have increasingly moved away from the existing Nova models and toward a new frontier-model effort led by researcher Pieter Abbeel, who came to Amazon through the acquisition of AI robotics startup Covariant.
Known internally as Frontier Model Research, or FMR, the initiative has become a top priority this year, with Amazon developing a new flagship foundation model that is expected to debut at this year’s re:Invent annual conference.
An Amazon spokesperson said the company has long supported AI models in production for extended periods because customers depend on them, and said Amazon remains committed to investing in frontier models.
“AI models remain one of the most important things we’re working on, and that hasn’t changed,” the spokesperson said.
The organizational change does not necessarily mean Amazon is abandoning Nova altogether, with the remaining Nova portfolio including the Nova 2 Sonic and Nova 2 Lite foundation models, Nova Forge, a service for building and customizing models, and Nova Act, Amazon’s AI agent technology.
Instead, the shift reflects a broader reorganization of Amazon’s AI efforts that has unfolded over the past year, with the company creating its AGI organization in 2023 to build foundation models and other technologies capable of powering future AI products across the company.
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Rohit Prasad, a longtime Alexa executive, led the organization until he departed in December 2025, and the AGI organization oversaw several specialized groups, including AGI Lab, which was established in 2024 after hiring AI startup Adept’s cofounders and licensing its technology.
People familiar with the transition said FMR has since become the organization’s primary focus, with Amazon tapping Abbeel to lead the group after Prasad’s departure.
Senior vice president Peter DeSantis has pursued a more focused AI strategy than his predecessor, concentrating Amazon’s engineering talent and computing resources on a smaller number of frontier-model efforts.
Amazon’s AI efforts will likely continue to evolve, with the company’s commitment to investing in frontier models remaining a key aspect of its overall strategy, according to the spokesperson, and as the company continues to develop its new flagship foundation model, it will be interesting to see how this new approach plays out in the market.
They will be watching.
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