Amazon itself has become so corrupted and disfunctional that all of their internal AI efforts amount to just burning billions for bottom-of-the-barrel results[0]. I'm not surprised that 5 person startups are building better AI products than all of Amazon, or that Bezos decided to start an AI company outside of Amazon.
It's really not surprising. AWS is definitely absolutely now in the category of "too big to fail". And the fact that there's an entire AWS region for US government classified stuff just underscores that.
Becoming TBTF has a very corrosive effect on organizations.
[0]https://labs.amazon.science/