Amazon has mostly sat out the AI talent war. This internal document reveals why.

As the AI talent war sweeps across Silicon Valley, Amazon has largely sat on the sidelines. A confidential internal document, and accounts from people familiar with the matter, reveal why.

The company has flagged its unique pay structure, lagging AI reputation, and rigid return-to-office rules as major hurdles. Now, the tech giant is being pushed to rethink its recruiting strategy as it scrambles to compete for top talent.

The document, from late last year, was written by the HR team covering Amazon’s non-retail businesses, including Amazon Web Services, advertising, devices, entertainment, and the newly formed artificial general intelligence team.

“GenAI hiring faces challenges like location, compensation, and Amazon’s perceived lag in the space,” the document noted. “Competitors often provide more comprehensive and aggressive packages.” Business Insider obtained a copy of the document.

Amazon’s absence from recent splashy AI hires underscores those concerns. Meta has pulled in high-profile talent from ScaleAI, Apple, and OpenAI. Google and OpenAI continue to be top destinations for AI experts, while Microsoft has even drafted a wish list of Meta AI employees it hopes to recruit.

Amazon’s spokesperson initially told BI that the company continues to “adapt our approach to remain highly competitive, maintaining flexibility in both our compensation packages and work arrangements to attract and retain the best AI talent in this dynamic market.”

Hours later, the spokesperson updated the statement, saying the premise of the story was “wrong,” without providing any specifics.

“We continue to attract and retain some of the best people in the world and they’re building and deploying GenAI applications at a rapid clip. Our compensation is competitive, but we also want missionaries who are passionate about inventing things that will make a meaningful difference for customers — for those kinds of people, there’s no better place in the world to build.”

Door desks and ‘egalitarian’ pay

Amazon is famously frugal. One of its origin stories recounts how the company bought cheap doors from Home Depot and hacked them together as office desks. This became guiding symbol of Amazon’s cautious spending, with founder Jeff Bezos still using door desks today.

This penny-pinching culture has smashed straight into an AI hiring battle that’s being fueled by unprecedented spending, putting Amazon in a tricky situation.

The internal document described compensation as one of the “hotly debated topics” among Amazon recruiters, citing the company’s strict use of fixed salary bands for each role. Amazon’s “egalitarian philosophy” on pay leaves its offers “below par” compared with top rivals, it added.

“The lack of salary range increases for several key job families over the past few years does not position Amazon as an employer of choice for top tech talent,” the document warned.

For Amazon, missing out on top AI talent is a potential risk. The pool of top-tier AI researchers and engineers is limited, and without experts with deep knowhow, it’s hard to compete at the frontier of the field. Indeed, Amazon has yet to find a blockbuster AI product like OpenAI’s ChatGPT or Anthropic’s Claude, although its Bedrock AI cloud service has made progress.

Amazon’s pay structure has been a long-standing source of tension.

Several people who spoke to Business Insider cited the 2020 departure of Amazon robotics VP Brad Porter as evidence of the company’s frugal approach hampering talent recruitment and retention. Porter left in part after Amazon refused to raise his pay band.

Amazon’s stock vesting schedule is also heavily backloaded, a structure that can be less attractive to new hires. The policy extends even to top executives, who generally receive no cash bonuses.

‘Voting with their feet’

In addition to highlighting Amazon’s “perceived lag in the AI space,” the internal document said generative AI has further intensified the competition for specialized talent, particularly individuals with expertise in large language models.

An August report from venture capital firm SignalFire shows Amazon is on the lower end of engineering retention, far below Meta, OpenAI, and Anthropic. Jarod Reyes, SignalFire’s head of developer community, told Business Insider that Amazon rivals are making bigger strides in AI, across open models, foundational research, and developer tooling.

“Amazon hasn’t clearly positioned itself as a leader in the generative AI wave,” Reyes said. “Engineers are paying attention and they’re voting with their feet.”

Some investors share that view. On Amazon’s earnings call last month, Morgan Stanley analyst Brian Nowak pressed CEO Andy Jassy on Wall Street’s “narrative right now that AWS is falling behind” in AI and fears of losing market share to rivals. Jassy’s response fell flat, sending Amazon’s stock lower during the call.

Amazon intends to tackle these concerns. According to the document, the company will refine its “compensation and location strategy” and host more events designed to highlight its generative AI capabilities. It also intends to set up dedicated recruiting teams for generative AI within business units like AWS to boost efficiency.

‘Hubs’ constrain talent

Another point of contention is Amazon’s aggressive return-to-office mandate, which has already caused logistical issues.

The company’s new “hub” policy — which requires employees to relocate to a central office or risk termination — has further limited its access to “high-demand talent like those with GenAI skills,” according to the internal document.

“Hubs constrain market availability,” it stated.

Amazon is exploring ways to allow for more “location-flexible” roles, the document added.

Amazon hasn’t been entirely on the sidelines. Last year, it brought on Adept CEO David Luan as part of a licensing deal with the AI startup. Luan now heads Amazon’s AI agents lab. But the company has also seen departures, including senior AI leaders including chip designer Rami Sinno and VP Vasi Philomin, who worked on Bedrock.

One Amazon recruiter told Business Insider that a growing number of job candidates started declining offers last year because of the company’s RTO policy. Even if a competitor pays less, people are open to taking the job if they can stay remote, this person said.

“We are losing out on talent,” this person added.

Indeed, Bloomberg reported recently that Oracle has hired away more than 600 Amazon employees in the past two years because Amazon’s strict RTO policy has made poaching easier.

Staying the course

The internal Amazon document dates to late last year, leaving open the possibility that the company has since adjusted its compensation approach to make exceptions for top AI talent.

Still, multiple people familiar with the situation told Business Insider there haven’t been any formal updates to internal pay guidelines. One current Amazon manager said it remains almost impossible for the company to enact sweeping changes, given its long track record of sticking to the existing system. The people who spoke with Business Insider asked not to be identified discussing sensitive matters.

“Based on how we run our business and what we have achieved, there are more risks than potential benefits from changing an approach that has been so successful for our shareholders over the past several decades,” Amazon wrote this year about executive compensation in its annual proxy statement.

Of course, the AI talent war may end up being an expensive and misguided strategy, stoked by hype and investor over-exuberance.

Some of the high-profile recruits Meta recently lured have already departed.

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