Amazon has largely refrained from aggressively competing in the AI talent war sweeping Silicon Valley. A confidential internal document from late 2024, obtained by Business Insider, alongside insights from insiders, reveals that Amazon faces significant challenges due to its unique pay structure, perceived lag in AI reputation, and rigid return-to-office (RTO) policies. The document, from Amazon's HR team for non-retail divisions including AWS and AI teams, notes that Amazon's "egalitarian philosophy" of using fixed salary bands results in compensation offers that are less competitive than those from rivals like Meta, OpenAI, Google, and Microsoft, which offer more comprehensive and lucrative packages to attract top AI talent. Additionally, Amazon's heavy emphasis on in-office work with its "hub" policy—requiring employees to relocate to central offices—limits its access to highly sought-after AI professionals who often prefer remote or flexible work arrangements. This contrasts with competitors who have adopted more generous remote work policies, enabling them to lure talent even at lower pay. Amazon's compensation approach, including stock vesting schedules heavily backloaded and lack of cash bonuses even for executives, has long been a source of dissatisfaction, highlighted by the 2020 departure of a top robotics VP over pay disputes. The internal document suggests Amazon's current model risks making it less attractive to premier AI engineers who are in limited supply and are highly mobile. Despite these challenges, Amazon has taken some steps to improve, including plans to refine its compensation and location strategies, create dedicated recruiting teams focused on generative AI, and host events to boost its AI profile. The company has brought in notable hires such as David Luan, former CEO of AI startup Adept, to lead AI projects. However, internal sentiment indicates little appetite for major changes to the established pay system, given its success over decades from a shareholder perspective. External analysis supports the notion that Amazon is lagging in AI talent retention and acquisition compared to competitors, with investors pressing CEO Andy Jassy on AWS's AI market position. Meanwhile, rivals like Meta and Oracle have actively poached Amazon employees, leveraging Amazon's stricter work policies and less competitive pay. In summary, Amazon's frugal culture, conservative compensation philosophy, and rigid workplace policies put it at a disadvantage in the intensifying competition for elite AI talent, prompting internal discussions about more adaptive strategies to attract and retain the workforce needed to lead in generative AI innovation.