Amazon Is Gutting Its AI Division After Sustained Failure

Bloomberg reported that most Nova text, video and image models are in a state where they stay supported but receive only the bare minimum resources. Engineering effort is moving to a single frontier-model effort led by Pieter Abbeel, whose Covariant startup Amazon acquired in 2024. The San Francisco AGI Lab has also closed, and Amazon confirmed layoffs in its AGI organization on July 22 but did not say how many people were affected. Business Insider reported the Nova deprecations in late July, and the team is building a new flagship foundation model expected to debut at Amazon's re:Invent conference later in 2026. An Amazon spokesperson framed the cuts as sharpening focus rather than retreating, saying building large AI models remains one of the most important things the company is working on. Some observers read the shift as AWS giving up on building a frontier model and expanding hosting and infrastructure around AI. For builders on AWS, existing Nova endpoints keep running but are unlikely to gain features, so migration planning matters. Nova Forge and Nova Act remain in the lineup. Founders may rely on Amazon for compute while competing with its own models, so designing for model portability reduces exposure to a supplier that has just cut back its model roadmap.