Key Takeaways
- Peter DeSantis, Amazon’s newly appointed AI leader, is prioritizing affordability in the artificial intelligence competition.
- The e-commerce giant intends to leverage proprietary Trainium and Inferentia processors for more economical AI model development.
- While Amazon’s Nova model underperformed in comparative tests, the upcoming Nova 2 promises improved results.
- AMZN shares have fallen approximately 8% since the start of the year amid concerns over $200 billion infrastructure investment.
- David Luan, who led Amazon’s AGI Lab, revealed his resignation this week.
Amazon is charting a distinctive course in artificial intelligence: prioritizing affordability over cutting-edge capabilities.
Peter DeSantis, recently named to lead Amazon’s AI initiatives, champions an economics-focused approach. His thesis is straightforward — artificial intelligence costs too much, and Amazon has the solution.
“AI has a cost problem,” DeSantis stated. “If we ultimately want AI to transform everything, the costs have to be different.”
DeSantis assumed AI leadership in December following the exit of former chief AI scientist Rohit Prasad. The 28-year company veteran previously spearheaded AWS development and semiconductor operations.
Amazon’s shares have declined approximately 8% year-to-date. Market participants worry about the tech giant’s $200 billion capital expenditure plans for this year — predominantly allocated to AI infrastructure — as financial analysts forecast roughly $9 billion in negative cash flow for the first quarter.
The expectations weighing on DeSantis are substantial.
The Proprietary Chip Approach
Amazon’s blueprint revolves around internally developed semiconductors: Trainium chips for model training and Inferentia for deployment. The company asserts these processors deliver up to 50% cost savings versus competing solutions.
“If we can build our models on our chips, we can build them at a fraction of the cost of a pure-play AI model provider,” DeSantis explained.
This pricing advantage has already drawn interest from clients. Boston-based pharmaceutical research company Nimbus Therapeutics discovered Amazon’s Nova model produced comparable accuracy to Anthropic’s Claude while costing just one-tenth as much.
The company additionally provides Nova Forge, enabling businesses to develop tailored AI solutions instead of subscribing to high-end alternatives like ChatGPT or Gemini.
Amazon’s primary Nova offering has underperformed competitors in independent evaluations. The organization claims Nova 2 delivers superior performance, though independent benchmark validation remains unavailable.
Amazon also responded slowly to the generative AI revolution. Following ChatGPT’s debut in late 2022, the company convened urgent strategic planning sessions.
“Amazon was slower to realize the importance of generative AI,” noted Lloyd Walmsley, senior analyst at Mizuho.
Workforce Challenges and Market Rivalry
Amazon confronts recruitment obstacles as well. Compensation for software engineers and research scientists lags behind Meta, OpenAI, Apple, and Anthropic, per Levels.fyi data. The organization recently eliminated roughly 30,000 professional positions through multiple workforce reductions.
This Tuesday, David Luan, who oversaw Amazon’s AGI Lab, confirmed his departure. Operations will persist under DeSantis’s supervision.
DeSantis indicates he isn’t pursuing headline-grabbing model unveilings like OpenAI and Anthropic. He characterized frequent releases as “kind of how you stay in the news” while questioning their practical value for clients.
Amazon reports that Nova model variations now process over 70% of Alexa interactions. The Rufus shopping assistant attracted more than 300 million users throughout 2025.
DeSantis recognized investor apprehension regarding expenditures but countered by comparing current skepticism to past doubts when Amazon expanded into physical retail and subsequently built AWS infrastructure.
Amazon’s AGI Lab, dedicated to autonomous AI systems, remains under DeSantis’s leadership after Luan’s announcement.
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