Amazon negotiates $7 billion acquisition of Descartes AI
Amazon is in talks to buy Descartes AI at a $7 billion valuation, a 75% premium over its last round. The deal centers on Descartes' Optimization System, which claims to cut inference costs significantly.
Amazon is in talks to acquire Descartes AI at a $7 billion valuation, potentially its largest AI-era acquisition. Descartes, founded in 2023, develops world models for live video and generative gaming. The deal focuses on Descartes' Optimization System (DOS), a hardware-agnostic technology that claims to make inference up to 8 times faster and at one-eighth the cost. DOS was developed using early access to Amazon's Tranium 3 chips. Amazon has not released new models since December 2025 and recently laid off most AI researchers, signaling a shift from model development to hardware optimization. Descartes last raised funds in May at a $4 billion valuation, meaning Amazon would pay a 75% premium. The acquisition aims to give AWS a competitive edge in serving tokens efficiently, aligning with a broader industry shift toward hardware efficiency as a primary benchmark. Amazon appears to be preparing for a world where hardware efficiency is the only benchmark that matters.