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Amazon is changing its AI strategy after AGI layoffs and the shutdown of its AGI Lab in July 2026. The company is cutting several AI projects and moving more staff toward frontier model research. Amazon wants fewer major projects that can compete with leading AI companies while serving enterprise customers. The strategy shift also brings AI engineering and computing resources under tighter leadership.
The move follows layoffs in Amazon’s AGI division and the closure of its San Francisco AGI Lab. Amazon formed the lab in 2024 after bringing talent from AI startup Adept. The company has also started winding down several Nova models, including Premier, Omni, Reel, and Canvas, according to Business Insider.
Amazon will keep some Nova products running for existing customers, although development will slow. Nova 2 Lite, Nova 2 Sonic, Nova Forge, and Nova Act remain part of the active portfolio. Nova Forge helps customers customize models, while Nova Act focuses on AI agents.
Amazon is putting greater focus on Frontier Model Research, led by AI researcher Pieter Abbeel. The team is working on a new foundation model that could launch at Amazon’s re:Invent event later this year.
An Amazon spokesperson told Reuters, “We're sharpening our focus on the initiatives that matter most for customers, so we can move faster on what counts.”
The company also defended its continued AI investment while explaining the model changes. Amazon told sources, “We're continuing to invest in and support the Nova models our customers rely on today ... We're also investing in the next generation of frontier model research.”
The shift shows Amazon moving from a broad AI portfolio toward fewer, bigger bets. The company now faces pressure to show stronger results from its frontier AI efforts.
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