According to a report by Business Insider, people familiar with the matter revealed that Amazon is making major adjustments to its artificial intelligence strategy, including gradually halting development of several in-house AI models, restructuring related teams, and investing more engineers and resources in an entirely new cutting-edge model strategy to strengthen the company’s competitiveness in top-tier AI models.
The adjustment follows Amazon’s layoffs in its artificial general intelligence (AGI) division last week and the closure of the AGI Lab research team. AGI Lab was established in 2024, when Amazon brought in most of the core team from AI startup Adept and used it to form the research organization.
The reorganization means that Amazon is refocusing its AI strategy. Unlike in the past, when it pursued multiple model directions simultaneously, including text, image, and video, the company is now concentrating its engineering talent and limited computing resources on its highest-priority projects.
According to people familiar with the matter, Amazon has begun gradually scaling back development of most of its flagship Nova models, including the high-end Premier and Omni models, the Reel video-generation model, and the Canvas image-generation model.
Some Amazon employees describe these models as having entered a “KTLO” (Keep the Lights On) state. This term in software engineering means that products will continue to be maintained to serve existing customers but are no longer a priority for the company’s research and development efforts.
People familiar with the matter said that more and more resources are being shifted from the existing Nova models to a new cutting-edge model project. The project is led by researcher Pieter Abbeel, who joined Amazon after the company acquired AI robotics startup Covariant. Internally codenamed FMR (Frontier Model Research), the project has become the highest priority in Amazon’s AI business this year.
Under this project, Amazon is developing an entirely new flagship foundation model, which is expected to be officially unveiled at the annual AWS re:Invent conference this fall.
An Amazon spokesperson told Business Insider that the company has always maintained AI models already deployed in production over the long term because customers continue to rely on these products. At the same time, the company remains firmly committed to investing in cutting-edge AI models.
The spokesperson said: “AI models remain one of our most important businesses, and that has not changed. As with any AI product portfolio, we will continue adjusting our model lineup based on customer needs and, as models evolve, provide customers with clear upgrade guidance and migration paths.”
However, the organizational changes do not mean that Amazon will completely abandon the Nova brand. The Nova products that remain include the foundation models Nova 2 Sonic and Nova 2 Lite, the Nova Forge service for building and customizing models, and the AI agent technology Nova Act. In fact, the new flagship model being developed by FMR could potentially continue using the Nova brand in the future.
More accurately, this adjustment is part of Amazon’s broader reorganization of its AI business over the past year.
Amazon established the AGI division in 2023 to develop foundation models and other core technologies capable of supporting the company’s future AI products. Rohit Prasad, an executive who had long overseen the Alexa business, led the division until leaving the company in December 2025.
The AGI division contained several specialized teams, one of which was AGI Lab. The lab was established in 2024, when Amazon hired the team of Adept co-founders and licensed its technology. Led by Adept co-founder David Luan, AGI Lab primarily conducted long-term foundational AI research. Luan left Amazon in February this year, and the company closed AGI Lab in the latest round of restructuring last week.
Meanwhile, FMR was also established within the AGI division with the goal of developing Amazon’s next-generation cutting-edge AI models. After Prasad’s departure, Amazon appointed Pieter Abbeel to take over the team. People familiar with the matter said that since then, FMR has gradually become the central focus of the entire AGI division.
The organizational structure of the entire AGI division was also adjusted. In December last year, Amazon placed the AGI division under the management of Senior Vice President Peter DeSantis and integrated it with the company’s chip-development and quantum-computing divisions.
People familiar with the matter said that compared with his predecessor Prasad, DeSantis has adopted a more focused AI strategy. During Prasad’s tenure, Amazon pursued multiple text, image, and video-generation model projects simultaneously; DeSantis, by contrast, has concentrated engineering talent and computing resources on a smaller number of more competitive cutting-edge model development projects.
Employees said that the company has disclosed almost nothing about the future plans for the Nova series, leaving teams internally facing considerable uncertainty.
People familiar with the matter said the layoffs came as a surprise to many employees because cutting-edge model researchers had long been regarded as some of Amazon’s most valuable technical talent. In addition, the AGI division had long used a job-level and compensation system different from those of other parts of the company in order to more aggressively attract and retain AI talent.
These changes mark a major shift in Amazon’s AI strategy. Just last year, AWS unveiled Nova Omni 2 at the re:Invent conference and positioned it as the company’s flagship multimodal reasoning model. In 2023, Amazon CEO Andy Jassy also personally pushed for the establishment of the AGI division, hoping to build Amazon’s most ambitious foundation model, and consequently formed six new research teams.
Yet in less than three years, the division has already begun gradually phasing out some flagship Nova models and restructuring its organization around a new cutting-edge model development plan.