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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Eugene is Business Insider’s Chief Tech Correspondent, where he leads coverage of Amazon. His reporting spans the company’s retail operations, AWS, Alexa, and its secretive internal work culture.Previously, he worked at CNBC, Fortune Magazine Korea, and Japan's Yomiuri Shimbun. He holds degrees from NYU and Columbia University’s Graduate School of Journalism.In 2022, Eugene broke a story uncovering Amazon’s practice of deceptively enrolling customers in Prime and deliberately making cancellation difficult. A year later, the Federal Trade Commission sued the company, citing his reporting. That case culminated in a record $2.5 billion settlement in 2025.His reporting has earned multiple honors, including the SF Press Club’s Bay Area Journalism Award and SPJ NorCal’s Excellence in Journalism Award.Eugene lives in the Bay Area. Contact him via email at [email protected], or Signal, Telegram, or WhatsApp at 650-942-3061. Use a personal email address, a nonwork WiFi network, and a nonwork device; here's our guide to sharing information securely. ExpertiseAmazon, Jeff Bezos, Andy Jassy, e-commerce, and cloud computing.Popular ArticlesAmazon:Internal Amazon emails give an exclusive look at how CEO Andy Jassy has started to run the company, with obsessive attention to the retail business and what some employees feel is micromanagingAndy Jassy will be the next CEO of Amazon. Insiders dish on what it's like to work for Jeff Bezos' successor, who built AWS into a $40 billion business.Internal documents show Amazon has for years knowingly tricked people into signing up for Prime subscriptions. 'We have been deliberately confusing,' former employee says.Inside Amazon's flailing brick-and-mortar ambitions: missed projections, pressure to cut costs, and a war with Whole FoodsInside Amazon's complex employee-review system, where workers feel left in the dark and managers expect to give 5% of reports bad reviewsAfter 28 years, 'Day 2' finally arrives at AmazonAWS, Alexa, healthcare:Inside Amazon's struggle to break into the lucrative market for SaaS business applications, including an internal pitch to buy $38 billion HubSpotInside Amazon's struggle to crack Nvidia's AI-chip dominanceAmazon's AI data center dream runs into the reality of 'zombie' facilities, higher costs, and labor shortagesAmazon is gutting its voice assistant, Alexa. Employees describe a division in crisis and huge losses on 'a wasted opportunity.'Amazon is working on a new 'Remarkable Alexa,' but internal politics and technical issues plague the projectAmazon projected huge losses from its healthcare business in 2024, but strong sales growth, internal document reveals
