Amazon's AI chief Peter DeSantis publicly admitted that Amazon's models have not been at the frontier for the most demanding workloads, and expressed hope to close the gap within a year. The company runs a dual strategy: building its own Nova2 models while investing $33 billion in Anthropic and hosting third-party models on Bedrock. The catch-up plan relies on custom Trainium chips (Trainium3 due later this year promising 4x performance), proprietary data from Amazon's retail and logistics operations, and engineering scale. Amazon's Q1 2026 earnings were boosted by a $16.8 billion Anthropic-related gain even as free cash flow fell 95%, highlighting the complex financial entanglement between Amazon as investor and competitor.
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