Amazon overhauls its AI strategy, winding down most flagship models

• Amazon is winding down most of its Nova in-house AI models.
• Amazon's AGI team was hit by layoffs.
• SVP Peter DeSantis wants to narrow the company's AI strategy.

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. Rather than investing across a number of text, image, and video models, the company is concentrating engineering talent and scarce computing resources on its highest priorities.

"KTLO"

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.

FMR

According to the people familiar with the matter, 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.

Under that effort, Amazon is developing a new flagship foundation model that is expected to debut at this year's re:Invent annual conference, which typically happens in the fall.

An Amazon spokesperson told Business Insider 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. "As with any AI portfolio, we continually evolve our model lineup based on what customers need, and we always provide customers clear guidance and migration paths as models advance."

Job cuts and departures

The organizational change does not necessarily mean Amazon is abandoning Nova altogether. The remaining Nova portfolio includes 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. Indeed, the new model that FMR is developing could emerge under the Nova brand.

Instead, the shift reflects a broader reorganization of Amazon's AI efforts that has unfolded over the past year.

Amazon created its AGI organization in 2023 to build foundation models and other technologies capable of powering future AI products across the company. Rohit Prasad, a longtime Alexa executive, led the organization until he departed in December 2025.

The AGI organization oversaw several specialized groups. One was AGI Lab, which Amazon established in 2024 after hiring AI startup Adept's cofounders and licensing its technology. Led by Adept cofounder David Luan, the lab focused on long-term AI research. Luan left Amazon in February, and the company shut down the AGI Lab last week as part of the latest reorganization.

Separately, Frontier Model Research was created within the AGI organization to develop Amazon's next generation of frontier AI models. After Prasad's departure, Amazon tapped Abbeel to lead the group. People familiar with the transition said FMR has since become the organization's primary focus.

DeSantis narrows the focus

The broader AGI organization was also reorganized. In December, Amazon placed it under senior vice president Peter DeSantis, combining it with the company's silicon development and quantum computing organizations.

People familiar with the transition said DeSantis has pursued a more focused AI strategy than his predecessor. Under Prasad, Amazon pursued multiple model families spanning text, image, and video generation. DeSantis, however, has concentrated Amazon's engineering talent and computing resources on a smaller number of frontier-model efforts, they said.

Employees said they have received little guidance about the long-term future of Nova models, fueling uncertainty across the organization.

The layoffs surprised many employees, the people said, because frontier model researchers had long been among Amazon's most prized technical talent. Employees said AGI also operated differently from the rest of the company, maintaining separate leveling and compensation systems to compete more aggressively for AI talent.

The changes mark a major shift in Amazon's AI ambitions. Just last year, AWS used its re:Invent conference to unveil Nova Omni 2 as its flagship multimodal reasoning model. In 2023, CEO Andy Jassy personally championed AGI as the team that would build Amazon's most ambitious foundation models, prompting the creation of six new research groups.

Less than three years later, the organization is retiring parts of its flagship Nova lineup and reorganizing around a new frontier model effort.

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