Amazon is reshaping its artificial intelligence strategy by scaling back development of several flagship Nova AI models, including the high-end Premier and Omni models, as well as the Reel video-generation model and Canvas image-generation model, according to a Business Insider report. Some employees described the affected models as being in "KTLO," or "keep the lights on," meaning they receive maintenance but are no longer a primary focus. The reported changes follow layoffs in Amazon's AGI organization and the closure of its AGI Lab last week. Amazon has shifted engineering talent and computing resources toward a new initiative known internally as Frontier Model Research (FMR), led by Pieter Abbeel, who joined after Amazon's acquisition of AI robotics startup Covariant. The project is expected to produce a flagship model that could debut at Amazon's re:Invent conference later this year. Shares of Amazon (AMZN) traded flat in pre-market hours on Tuesday ahead of the company's quarterly earnings on Thursday, following five consecutive losing sessions. Evercore ISI reiterated an 'Outperform' rating and a $315 price target, saying second-quarter revenue estimates appear achievable with more upside than downside risk. Retail sentiment on Stocktwits remained in ‘bullish’ territory over the past day.