Amazon designs custom AI chips for Echo and Fire TV as Alexa Plus expands to mobile devices

Amazon Builds Custom AI Chips for Echo Show and Fire TV

Amazon is manufacturing its own end-to-end silicon design for consumer devices, marking a significant shift in the company's hardware strategy. Panos Panay, Amazon's head of devices and services, revealed in an interview with CNBC that Amazon AI chips are already powering devices like the Echo Show 8, Echo Show 11, and Fire TV1

1

2

2

. The custom silicon for consumer devices, currently branded as AZ3 and AZ3 Pro chips, are designed to run as much on-device AI as possible, improving response times and enhancing security compared to cloud processing1

1

.

This move toward in-house semiconductor production gives Amazon more control over device pricing and performance. While the company still uses Qualcomm chips for other purposes, the shift to custom chips could help Amazon avoid rising semiconductor costs and maintain competitive pricing for consumers. Panay emphasized that if Amazon wants to deliver an ambient system in the home securely, the company needs to think carefully about how end-to-end hardware comes together1

1

.

Alexa Plus Drives Amazon's AI-Driven Hardware Strategy

The push for Amazon AI chips aligns directly with the company's rollout of Alexa Plus, an AI-powered digital assistant that handles more complex queries and learns user patterns. Alexa Plus is available free with Amazon Prime, while most capabilities cost $20 otherwise1

1

. The enhanced assistant can manage tasks ranging from talking through recipes to creating automatic conversations for doorbells and ordering food delivery1

1

.

Alexa Plus represents a shift away from the old voice assistant model where users had to speak in specific commands. Instead, it acts as one of the contextual assistants that can remember preferences, understand routines, and act more proactively3

3

. The service is intended to help users tie all their Amazon devices together, from Ring doorbells to Echo devices and Fire TV2

2

. This creates a cohesive ecosystem that competes with offerings from ChatGPT, OpenAI, and Google Gemini, which are also targeting the consumer experience2

2

.

Future Mobile Gadgets and On-the-Go Devices Coming Soon

Panay revealed that Amazon has a lab full of devices being tested and a "whole roadmap of on-the-go devices" in development1

1

2

2

. These future mobile gadgets would be devices people carry with them, collect data from, and talk to, maintaining consistent and contextual connection whether at home or work2

2

. Amazon's 2025 acquisition of Bee, a company that makes $49.99 wristbands capable of understanding voice commands and creating lists, answers questions, and drafts notes, signals the company's serious interest in wearables2

2

.

Panay suggested that computing might be moving away from traditional apps and screens toward more natural, context-aware conversations, though he acknowledged that the future form factor for AI devices remains uncertain2

2

4

4

. "I think we might be moving away from a world of apps and screens," Panay told CNBC, underlining that "conversation and context" will be more important for AI assistants1

1

2

2

. According to Amazon, consumers won't have to wait long for these new products1

1

.

Privacy Concerns and Voice Command Processing

As Amazon expands its AI capabilities, privacy considerations remain important. Amazon automatically processes voice command processing given to devices like the Echo Show 11 for analysis, and while users can turn off other Alexa settings, this particular setting cannot be adjusted1

1

. The new wave of AI devices is likely to come with similar requirements, raising questions about how much data users are comfortable sharing with Amazon1

1

.

Panay's broader discussion with CNBC also touched on Amazon's physical AI ambitions, including Zoox, Amazon Leo, and how chips, cloud infrastructure, satellite connectivity, and consumer devices could become more closely connected as AI moves between the cloud and the edge3

3

. Bank of America analysts have highlighted the potential of Alexa AI, particularly noting that Amazon's Prime Day events could serve as strategic opportunities to increase awareness and engagement with Alexa for Shopping, the AI-powered shopping assistant4

4

.