Amazon layoffs: Why is it gutting Nova AI models for one system?
Three years after Andy Jassy told staff that Amazon would chase artificial general intelligence with the same urgency as its biggest rivals, the company is
Three years after Andy Jassy told staff that Amazon would chase artificial general intelligence with the same urgency as its biggest rivals, the company is narrowing that ambition down to a single wager: one frontier model, built by one team, backed by the bulk of its computing budget, Business Insider reported. Getting there has meant layoffs at Amazon, a shuttered research lab, and the slow retirement of a model family Amazon once treated as its flagship. Amazon is set to report quarterly earnings on Thursday after its shares declined for five consecutive trading days. However, sentiment among retail traders on Stocktwits remained firmly bullish over the last 24 hours. How Amazon Artificial General Intelligence dream began The story starts in 2023, when Andy Jassy personally pushed for Amazon to compete at the cutting edge of AI research, a move that led to six new research groups being spun up almost immediately. A dedicated Artificial General Intelligence organisation, AGI, was created to house them, with long-serving Alexa executive Rohit Prasad installed at the top. UnderRohit Prasad, Amazon spread its resources wide.
Text models, image generators, video tools: the company wanted a presence in each category, and it built the Nova family to deliver on that. The strategy looked to be paying off as recently as last year's re:Invent conference, when AWS put Nova Omni 2 forward as its flagship multimodal reasoning system. Amazon narrows AI focus, retires most Nova models That breadth is now being dismantled. Business Insider report says Amazon has begun winding down most of its flagship Nova models, among them the high-end Premier and Omni systems, the Reel video tool and the Canvas image generator. Inside Amazon, engineers have taken to describing these products as being in "KTLO", shorthand for "keep the lights on": the software still runs for existing customers, but nobody is actively building on it anymore. That shift traces back to a leadership change. Rohit Prasad left Amazon in December 2025, and the following month the AGI organisation was folded into the portfolio of senior vice-president Peter DeSantis, sitting alongside the company's silicon and quantum computing divisions. Business Insider report citing people familiar with the situation, describe DeSantis as taking a far narrower view of AI strategy than his predecessor, pulling engineering talent and computing resources away from a scattered set of model families and pointing them instead at a much smaller number of frontier-scale efforts.
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