Amazon’s drone business can’t get off the ground as regulations, weak demand stymie progress
David Carbon, vice president of Prime Air at Amazon.com Inc., speaks during the Delivering the Future event at the Amazon Robotics Innovation Hub in Westborough, Massachusetts, US, on Thursday, Nov. 10, 2022.
Bloomberg | Bloomberg | Getty Images
In mid-January, Amazon’s drone delivery head David Carbon sat down for his weekly “AC/DC” video address to employees, where he gives the latest updates on Prime Air.
The acronym stands for A Coffee with David Carbon, and the event followed a very busy end to 2022. A decade after Prime Air’s launch, Amazon was starting drone deliveries in two small markets, bringing one of founder Jeff Bezos’ dreams closer to reality.
In the video, which was obtained by CNBC, Carbon told employees that Prime Air had recently kicked off durability and reliability (D&R) testing, a key federal regulatory requirement needed to prove Amazon’s drones can fly over people and towns.
“We started D&R and we’re into D&R as of the time of this filming by about 12 flights,” Carbon said. “So, really excited to get that behind us.”
However, there’s a cavernous gap between starting the process and finishing it, and employees could be forgiven for expressing skepticism.
Since at least last March, Carbon has been telling Prime Air staffers that D&R testing is underway, according to people who worked on the project and requested anonymity because they aren’t authorized to discuss it. He even had baseball caps made that said “D&R 2022” with the Prime Air logo on them.
But the Federal Aviation Administration didn’t provide clearance for testing until December, and the company began the campaign shortly after, in January of this year, Amazon said. Before a broader rollout, Prime Air must complete several hundred hours of flying without any incidents and then submit that data to the FAA, which oversees the approval process for commercial deliveries.
That all stands in the way of Prime Air’s expansion and its efforts to achieve Amazon’s wildly ambitious goal of whisking food, medicine and household products to shoppers’ doorsteps in 30 minutes or less.
Bezos predicted a decade ago that a fleet of Amazon drones would take to the skies in about five years. But as of now, drone delivery is restricted to two test markets — College Station, Texas, and Lockeford, California, a town of about 3,500 people located south of Sacramento.
Even in those hand-picked areas, operations have been hamstrung by FAA restrictions that prohibit the service from flying over people or roads, according to government records. That comes after years of challenges with crashes, missed deadlines and high turnover.
So, while Prime Air has signed up about 1,400 customers for the service between the two sites, it can only deliver to a handful of homes, three former employees said. In all, CNBC spoke to seven current and former Prime Air employees who said continued friction between Amazon and the FAA has slowed progress in getting drone delivery off the ground. They asked to remain anonymous because they weren’t authorized to speak on the matter.
Amazon told CNBC that thousands of residents have expressed interest in its drone-delivery service. The company said it’s making deliveries to a limited number of customers, with plans to expand over time.
CEO Andy Jassy, who succeeded Bezos in mid-2021, hasn’t talked a lot about Prime Air in public. He’s got much bigger problems to solve as Amazon navigates a period of deep cost cuts while trying to reaccelerate its business after revenue growth in 2022 was the slowest in the company’s quarter century on the public market.
But Jassy also wants to maintain a culture that’s thrived on big bets and risk-taking. His leadership circle, known as the S-team had previously set a goal of beginning drone deliveries in two locations by the end of 2022, according to two employees.
In January, a significant number of Prime Air workers were let go as part of the largest round of layoffs in Amazon’s history, totaling more than 18,000 people, CNBC previously reported. Prime Air sites in Lockeford, College Station and Pendleton, Oregon, were all hit by the job cuts, further straining operations.
The Lockeford site is now down to one pilot certified to operate commercial flights, a former employee said, so days after the layoffs were announced, Amazon flew a staffer there from College Station to help with deliveries.
Not that there’s much activity. Employees told CNBC that the Lockeford location can only deliver to two homes, which are located next door to one another and sit less than a mile from Amazon’s facility. Some details of the FAA restrictions were previously reported by The Information and Business Insider.
Employees who remain after the layoffs told CNBC that morale in the division has continued to sink since the cuts. With more work to do and less clarity on their parent company’s ongoing commitment to the mission, some are saying that they and their colleagues have started searching for jobs.
Maria Boschetti, an Amazon spokesperson, said in a statement that the layoffs and delays experienced by Prime Air haven’t affected its long-term plans for deliveries. The company is staffed to meet all applicable FAA requirements for safe operations and safety standards, she said.
“We’re as excited about it now as we were 10 years ago — but hard things can take time, this is a highly regulated industry, and we’re not immune to changes in the macro environment,” Boschetti said. “We continue to work closely with the FAA, and have a robust testing program and a team of hundreds in place who will continue to meet all regulatory requirements as we move forward and safely bring this service to more customers in more communities.”
Irrational confidence
Prime Air’s FAA problem is not a new phenomenon, and the company has long been working to try to maneuver through restrictions that limit its flying capabilities.
Of particular note was an effort in late 2021 to get a key rule changed. On Nov. 29 of that year, Sean Cassidy, Prime Air’s director of safety, flight operations and regulatory affairs, wrote to the FAA seeking relief from an order that dictates the operational conditions for Amazon’s drones, according to government filings.
Cassidy said in the letter that Amazon’s new MK27-2 drone had several safety upgrades from the earlier model, the MK27, that rendered many of the “conditions and limitations” set by the FAA obsolete. Among the restrictions Amazon sought to remove was a provision prohibiting Prime Air from flying its drones nearby or over people, roads and structures.
A year later, in November 2022, the FAA declined Amazon’s request. The agency said Amazon did not provide sufficient data to show that the MK27-2 could operate safely under those circumstances.
“Full durability and reliability parameters have not been established to permit” flying over or near people, the FAA said.
An Amazon drone operator loads the single shoebox-size box that can fit inside its MK27-2 Prime Air drone
Amazon
It was a surprising setback for Amazon. In early 2022, the company was so confident the FAA would soon lift the restrictions that, according to five employees, it paid for around three dozen staffers to temporarily live in hotels and Airbnbs in the area of Pendleton, a small town in rural eastern Oregon that’s about a three-hour drive from Portland.
Upon lifting of the restrictions, Amazon intended to move the workers to Lockeford and College Station, with the goal of beginning deliveries in the summer of 2022, the employees said.
But by October, the Pendleton crew was still “living out of their suitcases,” one employee said, while the company paid for their room and board.
The following month, Prime Air moved the employees to their respective sites, just in time for the FAA to deny Amazon’s effort for a reprieve. But the company opted to proceed anyway. On Christmas Eve, Carbon announced in a LinkedIn post that Prime Air had made its first deliveries in College Station and Lockeford.
“These are careful first steps that we will turn into giant leaps for our customers over the next number of years,” Carbon wrote.
Boschetti said Prime Air’s delivery team received “extensive training” at the Pendleton flight test facility before they were sent to delivery locations.
Some staffers viewed the launch as a rushed effort and questioned how the service would be able to operate fully without the ability to fly over roads or cars, former employees said.
What’s more, demand from Prime Air’s tiny customer base isn’t exactly soaring. At the Lockeford site, employees have to regularly contact the two households eligible for delivery to remind them to place orders, and Amazon incentivizes them with gift cards, according to two people familiar with the situation.
Meanwhile, Amazon is working on development of its next-generation Prime Air drone called the MK30, and known internally as CX-3. At an event in Boston in November, Carbon unveiled a mockup of the unmanned aircraft, which is supposed to be lighter and quieter than the MK27-2.
As of January, Carbon was still expressing optimism at his weekly AC/DC chats. He said Prime Air has a target to make of 10,000 deliveries this year between its two test sites, even with the D&R campaign unfinished and the FAA limitations firmly in place.
Carbon acknowledged that Prime Air “is not immune to the costs savings” that Jassy is implementing, but he sounded undeterred.
“This year is going to be a big year,” Carbon said. “We’ve got lots going on.”
The MK30, expected to launch in 2024, will have to go through the same regulatory process, including a separate D&R campaign, as well as so-called type certification, an even more rigorous FAA benchmark that allows a company to produce drones at scale.
It’s not a distinction the FAA is quick to hand out. Of all drone makers vying to deliver commercially, only one has received type certification — a startup called Matternet.
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The Hims app arranged on a smartphone in New York on Feb. 12, 2025.
Gabby Jones | Bloomberg | Getty Images
Hims & Hers Health shares closed up 5% on Tuesday after the company announced patients can access Eli Lilly‘s weight loss medication Zepbound and diabetes drug Mounjaro, as well as the generic injection liraglutide, through its platform.
Zepbound, Mounjaro and liraglutide are part of the class of weight loss medications called GLP-1s, which have exploded in popularity in recent years. Hims & Hers launched a weight loss program in late 2023, but its GLP-1 offerings have evolved as the company has contended with a volatile supply and regulatory environment.
Lilly’s weekly injections Zepbound and Mounjaro will cost patients $1,899 a month, according to the Hims & Hers website. The generic liraglutide will cost $299 a month, but it requires a daily injection and can be less effective than other GLP-1 medications.
“As we look ahead, we plan to continue to expand our weight loss offering to deliver an even more holistic, personalized experience,” Dr. Craig Primack, senior vice president of weight loss at Hims & Hers, wrote in a blog post.
A Lilly spokesperson said in a statement that the company has “no affiliation” with Hims & Hers and noted that Zepbound is available at lower costs for people who are insured for the product or for those who buy directly from the company.
In May, Hims & Hers started prescribing compounded semaglutide, the active ingredient in Novo Nordisk‘s GLP-1 weight loss medications Ozempic and Wegovy. The offering was immensely popular and helped generate more than $225 million in revenue for the company in 2024.
But compounded drugs can traditionally only be mass produced when the branded medications treatments are in shortage. The U.S. Food and Drug Administration announced in February that the shortage of semaglutide injections products had been resolved.
That meant Hims & Hers had to largely stop offering the compounded medications, though some consumers may still be able to access personalized doses if it’s clinically applicable.
During the company’s quarterly call with investors in February, Hims & Hers said its weight loss offerings will primarily consist of its oral medications and liraglutide. The company said it expects its weight loss offerings to generate at least $725 million in annual revenue, excluding contributions from compounded semaglutide.
But the company is still lobbying for compounded medications. A pop up on Hims & Hers’ website, which was viewed by CNBC, encourages users to “use your voice” and urge Congress and the FDA to preserve access to compounded treatments.
With Tuesday’s rally, Hims and Hers shares are up about 27% in 2025 after soaring 172% last year.
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Meta CEO Mark Zuckerberg holds a smartphone as he makes a keynote speech at the Meta Connect annual event at the company’s headquarters in Menlo Park, California, on Sept. 25, 2024.
Manuel Orbegozo | Reuters
Meta’s head of artificial intelligence research announced Tuesday that she will be leaving the company.
Joelle Pineau, the company’s vice president of AI research, announced her departure in a LinkedIn post, saying her last day at the social media company will be May 30.
Her departure comes at a challenging time for Meta. CEO Mark Zuckerberg has made AI a top priority, investing billions of dollars in an effort to become the market leader ahead of rivals like OpenAI and Google.
Zuckerberg has said that it is his goal for Meta to build an AI assistant with more than 1 billion users and artificial general intelligence, which is a term used to describe computers that can think and take actions comparable to humans.
“As the world undergoes significant change, as the race for AI accelerates, and as Meta prepares for its next chapter, it is time to create space for others to pursue the work,” Pineau wrote. “I will be cheering from the sidelines, knowing that you have all the ingredients needed to build the best AI systems in the world, and to responsibly bring them into the lives of billions of people.”
Vice President of AI Research and Head of FAIR at Meta Joelle Pineau attends a technology demonstration at the META research laboratory in Paris on February 7, 2025.
Stephane De Sakutin | AFP | Getty Images
Pineau was one of Meta’s top AI researchers and led the company’s fundamental AI research unit, or FAIR, since 2023. There, she oversaw the company’s cutting-edge computer science-related studies, some of which are eventually incorporated into the company’s core apps.
She joined the company in 2017 to lead Meta’s Montreal AI research lab. Pineau is also a computer science professor at McGill University, where she is a co-director of its reasoning and learning lab.
Some of the projects Pineau helped oversee include Meta’s open-source Llama family of AI models and other technologies like the PyTorch software for AI developers.
Pineau’s departure announcement comes a few weeks ahead of Meta’s LlamaCon AI conference on April 29. There, the company is expected to detail its latest version of Llama. Meta Chief Product Officer Chris Cox, to whom Pineau reported to, said in March that Llama 4 will help power AI agents, the latest craze in generative AI. The company is also expected to announce a standalone app for its Meta AI chatbot, CNBC reported in February.
“We thank Joelle for her leadership of FAIR,” a Meta spokesperson said in a statement. “She’s been an important voice for Open Source and helped push breakthroughs to advance our products and the science behind them.”
Pineau did not reveal her next role but said she “will be taking some time to observe and to reflect, before jumping into a new adventure.”
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