Remember the Amazon.com Inc (AMZN) Fire Phone? Of course you don't. It was a spectacular flop that vanished over a decade ago. Well, Amazon apparently believes in second chances, because it's reportedly dialing up a new attempt to crack the smartphone market. This time, the project has a suitably ambitious codename: "Transformer."

According to sources cited by Reuters, the initiative lives within Amazon's devices and services unit. It's not just about building another rectangle that makes calls; it's about fulfilling founder Jeff Bezos's long-standing sci-fi dream. The goal, as the report frames it, is to create that ubiquitous, voice-driven "Star Trek" computer—but one that fits in your pocket.

AI as the Operating System

The "Transformer" project's big idea is to put artificial intelligence front and center. How front and center? Sources suggest the AI capabilities could be so integral that they might make the traditional app store obsolete. Think about that for a second. The entire economic and software distribution model of the modern smartphone, dominated by Apple (AAPL) and Samsung, potentially sidelined by Amazon's AI.

Alexa would still be a core feature, but she might not be the primary operating system. Instead, the device is envisioned as a hyper-personalized mobile hub, streamlining access to Amazon's ecosystem—think one-touch (or one-voice) access to Prime Video, Prime Music, or even your Grubhub order. Amazon did not immediately respond to a request for comment on the reports.

The ZeroOne Team and the 'Dumbphone' Option

Driving this ambitious project is a year-old group inside Amazon called ZeroOne, which is led by J Allard, a former high-profile executive at Microsoft Corp (MSFT). The team's mandate appears to be exploring the full spectrum of mobile devices.

Interestingly, Reuters' sources indicate Amazon isn't just looking at a super-smart AI phone. They're also reportedly exploring the opposite end of the spectrum: so-called "dumbphones." These would be minimalist devices, perhaps similar to the Light Phone, designed explicitly to counter screen addiction. It's a fascinating dual-track approach—build the most intelligent phone imaginable, and also build one that helps you ignore it.

Powering the Dream: A Massive AI Backend

You can't run a transformative AI smartphone on hopes and dreams. You need serious silicon and server farms. Amazon's hardware ambitions here are running in parallel with absolutely massive investments in the backend AI infrastructure.

In a related development, Nvidia's Vice President Ian Buck said on Thursday that the chipmaker will deliver a staggering 1 million AI chips to Amazon Web Services (AWS) by 2027. That's the kind of firepower needed to train and run the advanced models a device like "Transformer" would rely on.

Furthermore, Amazon and Meta Platforms Inc (META) are reportedly fueling a record $45.1 billion data center construction boom. All this steel, concrete, and silicon is the unglamorous but essential foundation for the flashy AI-driven future companies are racing to build.

In early trading Friday, shares of Amazon were down 0.60% at $207.50.