Amazon $AMZN designs its own chips for Echo Show and Fire TV devices, the company's devices and services chief said, confirming for the first time that Amazon is pursuing an end-to-end semiconductor strategy for its consumer hardware.
Hardware chief Panos Panay says Amazon builds end-to-end silicon for its most critical devices and hints a portable AI gadget is coming soon
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Amazon $AMZN designs its own chips for Echo Show and Fire TV devices, the company's devices and services chief said, confirming for the first time that Amazon is pursuing an end-to-end semiconductor strategy for its consumer hardware.
Panos Panay, head of devices and services at Amazon, spoke with CNBC's "The Tech Download" podcast about the company's chip ambitions and its vision for AI-enabled consumer gadgets. Custom silicon from Amazon powers several of its consumer products, including the Echo Show 8, Echo Show 11, and Fire TV, Panay said in the interview. The AZ3 and AZ3 Pro, revealed last October, process AI workloads locally rather than sending them to remote servers — an approach widely regarded in the industry as both quicker and better for user privacy.
"We do make our own end-to-end silicon for the devices that we ship," Panay told CNBC. He said the chip strategy is tied to Amazon's goal of delivering what he described as an ambient home experience. "If we're going to go deliver this ambient experience in the home for people in the most secure way, we definitely need to think about how that end-to-end delivery of hardware comes together," he said. Amazon continues to use chips from suppliers including Qualcomm $QCOM in some of its devices.
The custom chip push runs alongside Amazon's broader effort to advance Alexa+, an upgraded version of its digital assistant that launched for general availability in the U.S. this year. Designed to learn context and adapt to individual habits over time, Alexa+ is also meant to serve as connective tissue across Amazon's product ecosystem, linking Ring doorbells, Echo speakers, Fire TV, and other devices into a single coherent experience.
Panay also signaled that Amazon is developing portable AI devices. Citing a "whole roadmap of on-the-go devices," Panay sketched out a category of portable companions that gather information and respond to voice throughout the day, maintaining continuity whether the user is at home, at work, or somewhere in between. "You won't have to wait long" for such a product, he said. Amazon's push into portable hardware got an early foothold with its acquisition of Bee, whose wristband — priced at $49.99 — can take voice input and perform tasks like answering questions and drafting notes.
Asked more broadly about the future of AI hardware, Panay was circumspect. "When you think about the future of AI devices, you got to be super skeptical right now for anyone who tells you they know what they are," he said. "I have a lab full of devices."
Amazon's consumer chip work is separate from its cloud semiconductor operation. The company's Trainium and Graviton chips, used inside Amazon Web Services data centers, are generating an estimated $20 billion in annualized revenue across three product lines, CEO Andy Jassy disclosed in his April shareholder letter. Amazon has also entered talks to sell Trainium chips to outside data center operators, expanding beyond its current AWS-only distribution model.
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