I worked on the Echo Show team. The product had been in development for over a year when we invested in Nucleus. I remember thinking it was very strange that Amazon was investing in that company when we were building such a similar product internally.
I've definitely seen the same thing happen – an org that isn't sure it can build function X well might invest in a startup building X just in case.
Of course, they may or may not take advantage of that situation by misusing confidential information.
Either way the startup could lose (or just not have much negotiating power).
So yeah, sounds like this may not be a case of AMZN misbehaving. But I'm still not sure I'd want to talk to them if I were a startup, at least until I know they really need us and are willing to pay a lot.
Nothing I saw indicated that the Echo Show was in any way influenced by Nucleus.
I suspect, but don't know directly, that this investment was more about trying to jumpstart an ecosystem of third-party Echo devices rather than hedging bets.
