Amazon tells investors it’s leaning into custom AI chips for Echo and Fire TV

Amazon is pushing further into custom semiconductor design to power AI features on its own consumer devices, according to remarks from its devices and services chief.

In comments reported by CNBC, Panos Panay said Amazon “make[s] our own end-to-end silicon” for devices it ships, describing the strategy as a way to bind hardware and software tightly so Amazon can deliver what it calls an “ambient experience” at home with an emphasis on security. Panay framed custom chips as especially important for what he referred to as the company’s most critical devices.

CNBC’s account said Amazon’s custom silicon is already used in products including the Echo Show 8 and Echo Show 11 smart displays, as well as Fire TV devices. The specific silicon and how it is deployed in each model were not detailed in the reported remarks, beyond the general point that Amazon is designing chips for certain devices rather than relying entirely on third-party components.

The interview also pointed to Amazon’s broader on-device AI push. CNBC linked Amazon’s custom approach to the company’s AZ3 and AZ3 Pro chips, which Amazon unveiled in October. Those chips are designed to run AI models directly on the device instead of sending requests to the cloud, an approach intended to improve responsiveness and reduce reliance on network connectivity for some functions.

Panay also indicated Amazon is not abandoning third-party silicon wholesale. CNBC reported that Amazon still uses chips from companies such as Qualcomm, suggesting a hybrid strategy in which Amazon builds silicon for particular device categories while continuing to source other components externally.

Separately, the remarks included hints about future device directions. CNBC said Panay discussed a roadmap that includes “on-the-go devices,” adding that users “won’t have to wait long,” though the comments did not specify timelines or name a product category beyond the general direction.

Industry observers have long noted that hardware companies such as Apple gain flexibility by controlling both chip design and the software stack. Amazon’s approach, as described by Panay, echoes that logic for smart home and streaming products, where voice processing, local AI inference, and device responsiveness can be central to user experience.

Amazon’s hardware chief did not provide new quantitative disclosures in the reported comments, such as the size of the custom chip program, margins, or what share of device units now use in-house silicon. It also did not disclose which additional AI functions are expected to migrate fully to on-device processing beyond referencing the AZ3 line and the continuing emphasis on end-to-end silicon for key products.