AWS puts $1 billion into new AI unit to embed engineers with customers, joining growing wave

Amazon Web Services on Tuesday announced it is investing $1 billion in a new Forward Deployed Engineering unit that will help its customers build and roll out artificial intelligence systems.

A forward-deployed engineer, or an FDE, is an employee who is embedded directly within a different business to try and accelerate a technical transformation. Defense contractor Palantir coined the term more than a decade ago, but it's seen a resurgence among software vendors looking to boost adoption by taking talent directly into clients' facilities.

Leading model developers, including OpenAI and Anthropic, announced their own FDE companies earlier this year, in partnership with banks, private equity and consulting firms. Now, AWS is looking to carve out its own piece of the market.

"We've had capabilities over the years, but structurally this is like getting everybody together in one business unit with a common rubric of deployment," Francessca Vasquez, AWS' vice president of frontier AI engineering and services, said in an interview. "It's the first time we're doing it in that way."

Amazon, which is the top cloud provider by revenue, is the first hyperscaler to announce this kind of initiative.

Vasquez said AWS' new unit will be seeded with "thousands" of FDEs. An initial pod of roughly five or six engineers will be embedded within an AWS customer at a time, and those employees will also work alongside AI agents, which are tools that can independently complete tasks on behalf of their users.

AWS said in a blog post that its FDE embeds will partner closely with customers' business, engineering and security staffers, and they'll look to leave behind self-sufficient teams with new solutions and capabilities in a matter of weeks.

"The currency that the customers are always talking about right now is speed," Vasquez said. "We do see FDE being a choice for customers who are looking for accelerated value back to their stakeholders, their customers, their executive teams."

In May, Anthropic announced it had formed a new "AI services company" with Blackstone, Hellman & Friedman and Goldman Sachs to help mid-sized businesses deploy its Claude AI models.

Days later, Anthropic's chief rival, OpenAI, announced the OpenAI Deployment Company alongside TPG, Advent International, Bain Capital, Brookfield Asset Management and other firms. It said the new organization would expand OpenAI's ability to embed FDEs into companies that are working on "complex problems in demanding environments."

Amazon has poured billions of dollars into both Anthropic and OpenAI, but Amazon executives have not been shy about their ambitions to compete directly with the labs in some areas. A spokesperson for AWS said the company expects to have the opportunity to work with the FDE companies from OpenAI and Anthropic, and it will share more details about its partner programs in the near future.

Organizations including the Allen Institute, the National Basketball Association, Ricoh and the National Football League are already working with AWS FDEs, according to the company. Vasquez said companies in highly regulated industries with diverse datasets will be the next group of adopters.

"This is for customers that are really looking at ways to evolve their workflows," Vasquez said.

CNBC's Jordan Novet contributed to this report.

WATCH: Amazon’s fixing the ‘plumbing’ of AI for businesses, says AWS AI chief Matt Wood