Amazon is prioritizing the development of its own chips for key consumer devices as it seeks greater control over the integration of hardware and software in an increasingly AI-driven product lineup.

In a wide-ranging interview on CNBC’s “The Tech Download” podcast, Panos Panay, head of devices and services at Amazon, discussed for the first time the company’s approach to semiconductors in its hardware and how it is 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 noted that Amazon’s custom silicon is already present 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 relying on the cloud. Many device makers view locally processed AI as offering advantages in speed and security.

The move mirrors strategies employed by companies like Apple, which designs its own chips to achieve tighter hardware-software integration. Panay emphasized that for certain critical devices, end-to-end silicon is essential.

“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,” he said.

Panay added that Amazon continues to work with external chip suppliers such as Qualcomm for some products.

The emphasis on custom silicon is part of a broader effort to enhance AI capabilities across its device portfolio. The company launched Alexa+ for general availability in the U.S. this year — a significantly upgraded version of its digital assistant capable of handling more complex queries and tasks, learning user context and patterns. Alexa+ aims to tie together Amazon’s ecosystem of hardware, from Ring doorbells to Echo devices and Fire TV.

Rethinking the Future of AI Devices

As Amazon’s digital assistant gains more advanced features, Panay said the company is rethinking how users will interact with devices and what that means for the next generation of 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.

When asked about the types of gadgets Amazon is developing, Panay was cautious about specifics but hinted at significant activity.

“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,” he said.

Last month, Qualcomm CEO Cristiano Amon told the same podcast that the company was working on 40 new AI-powered devices as consumer electronics firms search for the next major category after the smartphone.

Alexa+ will continue to compete with offerings from OpenAI’s ChatGPT and Google’s Gemini, both of which are also targeting the consumer experience. Google is leveraging the reach of the Android operating system to expand its user base, while companies like Samsung are building many of their AI features on Gemini models.

For Amazon, Alexa+ represents a strategic effort to deepen user engagement within its own ecosystem of devices and services, potentially driving more commerce and loyalty.

Last year, Amazon made a notable foray into wearables with its acquisition of Bee, a company that produces $49.99 wristbands capable of understanding voice commands, creating lists, answering questions, and drafting notes. Panay indicated there is a broader roadmap for on-the-go devices.

“So when you are back in the home or when you are at work, that connection stays consistent and contextual,” Panay said. He added that “you won’t have to wait long” for an Amazon product in this category.

Implications for Amazon’s Hardware Future

Analysts see Amazon’s focus on custom silicon and AI-native devices as a representation of a maturing strategy in consumer hardware. By developing its own chips, the company gains greater control over performance, power efficiency, and integration with its software ecosystem. This vertical integration approach is expected to help Amazon differentiate its products in a competitive market where AI capabilities are becoming table stakes.

The emphasis on on-device AI processing also addresses growing concerns around privacy and latency. Running models locally reduces dependence on cloud infrastructure and can provide faster, more responsive experiences. However, it also requires significant investment in chip design and optimization.

The company’s hardware efforts are closely tied to its services business. Against that backdrop, enhanced AI capabilities in devices like Echo and Fire TV are expected to drive greater usage of Amazon’s ecosystem, from shopping to entertainment and smart home control. This integration strategy has been a hallmark of Amazon’s approach, allowing it to compete effectively against specialized players in various categories.

Switzerland’s central bank has backed the government’s push for tougher capital requirements for UBS, saying the country’s biggest lender already holds enough capital to comply with the proposed rules aimed at preventing another banking crisis like the collapse of Credit Suisse in 2023.

The assessment from the Swiss National Bank (SNB) comes boldly as it challenges UBS’s repeated argument that the government’s proposals are excessive and would damage both its competitiveness and Switzerland’s position as a global financial center.

The comments also strengthen the government’s hand as it seeks to overhaul banking regulations following the emergency rescue of Credit Suisse, which forced UBS to acquire its long-time rival in a state-backed deal worth about 3 billion Swiss francs ($3.4 billion) in March 2023.

Speaking to reporters in Bern on Thursday, SNB Vice Chairman Antoine Martin defended the government’s proposal requiring UBS to fully capitalize its foreign subsidiaries, describing the measures as appropriate given the bank’s size and systemic importance.

“It is proportionate,” Martin said, referring to the government’s capital proposal. “It would put UBS in line with international peers with respect to capital requirements.”

Government Wants UBS To Add $20 Billion In Top-Quality Capital

Following Credit Suisse’s collapse, Swiss authorities launched one of the country’s biggest regulatory overhauls in decades to reduce the risk of taxpayers once again being forced to rescue a globally systemic bank. At the center of the reform package is a proposal requiring UBS to fully capitalize its overseas subsidiaries rather than relying heavily on parent-company guarantees.

The Swiss government estimates that implementing the proposals would require UBS to hold approximately $20 billion in additional Common Equity Tier 1 (CET1) capital, the highest-quality capital banks maintain to absorb losses during periods of financial stress. CET1 capital consists mainly of ordinary shares and retained earnings and is regarded by regulators as the strongest buffer protecting banks against financial shocks.

UBS has consistently opposed the proposal, arguing that the additional requirements would place it at a competitive disadvantage compared with international rivals and reduce its ability to compete globally.

The central bank, however, concluded that UBS is already in a much stronger capital position than the lender has suggested. In its 2026 Financial Stability Report, the SNB said UBS’s eligible CET1 capital already exceeds the fully implemented capital requirements under the current regulatory framework, which are scheduled to apply from 2030, by approximately $13 billion.

The report also noted that UBS held an additional $9 billion in available reserves at the end of 2025.

“According to the pro forma calculations of the authorities and including reserves, UBS already has sufficient capital to meet the proposed requirements,” the SNB said.

The finding suggests that, when existing capital surpluses and reserves are taken into account, UBS would not need to undertake a large emergency capital raising to comply with the government’s proposed rules.

The SNB also emphasized that the government intends to introduce the tougher capital rules gradually rather than immediately.

Authorities have proposed a seven-year transition period, giving UBS ample time to adjust its capital structure while continuing normal business operations.

“Taking into account this transition period and the bank’s expected profits, UBS can be expected to be able to comply with the proposed capital measures, while continuing to distribute profits to its shareholders,” the central bank said.

That assessment is likely to reassure investors concerned that tougher regulation could threaten UBS’s dividend policy or share buyback programme.

Reforms Aim To Prevent Another Credit Suisse Crisis

The proposed reforms stem directly from the collapse of Credit Suisse, whose rapid loss of customer confidence culminated in an emergency government-brokered takeover by UBS.

The rescue remains one of the most significant banking failures since the 2008 global financial crisis and left Switzerland with a single globally systemic bank whose balance sheet now exceeds the country’s annual economic output. The disappearance of Credit Suisse intensified calls for stricter oversight, with policymakers arguing that UBS’s increased size and systemic importance warrant stronger capital safeguards.

Swiss authorities have sought to ensure that any future banking crisis can be managed without requiring taxpayer-funded support.

Beyond UBS, the SNB said Switzerland’s banking sector remains well positioned to withstand an increasingly uncertain global economic environment.

The central bank acknowledged that conditions have become more challenging since its 2025 Financial Stability Report, citing the conflict in the Middle East, persistent trade tensions, and broader political and economic uncertainty.

Nevertheless, it concluded that the country’s banks remain financially resilient.

“The Swiss banking sector is well positioned to withstand the current challenging macroeconomic and financial environment,” the SNB said.

The assessment comes as regulators worldwide continue strengthening oversight of major financial institutions amid concerns over geopolitical risks, elevated interest rates and slowing global economic growth. Thus, Switzerland presses ahead with reforms designed to make its banking system more resilient following one of the country’s biggest financial upheavals in modern history.