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Amazon is focusing on building chips for its "critical" consumer devices, the company's top hardware executive told CNBC.
In a wide-ranging interview on CNBC's "The Tech Download" podcast, Panos Panay, the head of devices and services at Amazon, discussed, for the first time, the company's approach to semiconductors in its own hardware and how it's experimenting with different types of AI-enabled gadgets.
"We do make our own end-to-end silicon for the devices that we ship," Panay said.
He said Amazon's custom silicon is in devices such as the Echo Show 8, Echo Show 11 and Fire TV.
In October, Amazon unveiled the AZ3 and AZ3 Pro chips designed to run AI models on-device rather than in the cloud. Many device makers see locally run AI as faster and more secure.
Some hardware makers like Apple design their own chips, which can give a consumer electronics company more control over the integration of hardware and software.
"On some of the more critical devices right now, our focus is end-to-end silicon, because to your point, if you really want that hardware and software connection ... and 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," Panay said.
Panay added that the company still also uses chips from companies like Qualcomm .
For Amazon, the focus on custom chips is part of its broader push to improve AI on devices.
Amazon launched Alexa+ for general availability in the U.S. this year. Alexa+ is a souped-up version of Amazon's digital assistant, which can handle more complex queries and tasks. Alexa+ can learn context and user patterns. Amazon has a range of hardware from Ring doorbells to Echo Devices and Fire TV. Alexa+ is intended to help users tie all their Amazon products together.
As Amazon's digital assistant gets advanced capabilities, Panay said he was thinking about how users will interact with devices and what that means for future gadgets.
"I think we might be moving away from a world of apps and screens," Panay said, adding that "conversation and context" will be more important for AI assistants.
Asked what kind of gadgets the company was working on, Panay said: "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. I have a lab full of devices."
Last month, Qualcomm CEO Cristiano Amon told "The Tech Download" that the company was working on 40 new AI-powered devices as consumer electronics companies look for the next big hit after the smartphone.
Alexa+ will continue to compete with offerings from ChatGPT with OpenAI and Google Gemini which are also going after the consumer experience. Google is using the reach of the Android operating system to acquire more users, while companies like Samsung are building a lot of their AI features on Gemini models.
For Amazon, Alexa+ is a way for the company to lock users into its own ecosystem of devices and e-commerce.