Amazon’s hardware chief says custom chips are central to its next AI device push

Amazon is intensifying its efforts to develop custom chips integral to its upcoming consumer devices, according to insights from Panos Panay, the company's head of devices and services, shared during an interview on CNBC's "The Tech Download" podcast. In this revealing discussion, Panay detailed Amazon's strategy for incorporating semiconductors into its hardware lineup, highlighting its experimentation with various AI-enabled gadgets. "We create our own end-to-end silicon for the devices we distribute," he stated, pointing out that this custom silicon is already featured in products like the Echo Show 8, Echo Show 11, and Fire TV. Recently, Amazon introduced its AZ3 and AZ3 Pro chips, which are engineered to run AI models directly on devices rather than relying on cloud computing. This shift towards on-device AI is viewed as a means to enhance speed and security. Panay acknowledged that while Amazon is focusing on its proprietary chips, it still utilizes components from other manufacturers, including Qualcomm. The company's drive for custom silicon aligns with a larger initiative to elevate AI functionalities within its devices. Earlier this year, Amazon rolled out Alexa+, an advanced version of its digital assistant capable of managing more intricate queries and tasks while learning user contexts and preferences. This upgrade is designed to seamlessly link various Amazon products, from Ring doorbells to Echo devices. Panay envisions a future where user interaction with gadgets transcends traditional apps and screens, emphasizing the significance of "conversation and context" for AI assistants. When questioned about the types of devices in development, he remarked on the uncertainty surrounding future AI gadgets but hinted at a plethora of innovative concepts being explored in their labs. Qualcomm's CEO recently noted his company's endeavor to create 40 new AI-powered devices, reflecting a broader industry trend as consumer electronics companies seek the next breakthrough following the smartphone era. With Alexa+ competing against offerings from ChatGPT and Google Gemini, Amazon aims to fortify its ecosystem and retain user loyalty. Last year, Amazon expanded into wearables by acquiring Bee, a company known for its voice-activated wristbands. Panay spoke of a "whole roadmap of on-the-go devices"—gadgets designed for portability that collect data and maintain conversational continuity for users in various environments. He assured that consumers won't have to wait long for Amazon's latest innovations to hit the market.