Amazon is reshaping its artificial intelligence strategy following a series of layoffs in its AGI division and the shutdown of its AGI Lab in July 2026. The tech giant is scaling back development on several Nova models and reallocating staff and computing resources toward frontier AI research and new foundation models.
The company is reducing the number of major AI projects to better compete with leading AI firms while continuing to serve enterprise customers. This strategic shift also brings AI engineering and computing resources under tighter leadership.
The moves come after Amazon laid off employees in its AGI unit and closed its San Francisco AGI Lab, which was formed in 2024 after acquiring talent from AI startup Adept. According to Business Insider, Amazon has begun winding down several Nova models, including Premier, Omni, Reel, and Canvas.
Amazon will continue to support some Nova products for existing customers, though development pace will slow. Models that remain active in the portfolio include Nova 2 Lite, Nova 2 Sonic, Nova Forge, and Nova Act. Nova Forge helps customers customize models, while Nova Act focuses on AI agents.
Greater emphasis is now placed on Frontier Model Research, led by renowned AI researcher Pieter Abbeel. The team is developing a new foundation model that could debut 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.”
This shift signals Amazon moving from a broad AI portfolio toward fewer, bigger bets. The company now faces pressure to demonstrate stronger results from its frontier AI efforts.