Many technology news outlets have been reporting on Friday’s announcement by Amazon that the global online buying platform will acquire autonomous driving technology provider Zoox for an estimated price of $1.2 billion.

The Wall Street Journal had reported in May that the companies were in advanced talks, but the deal would value Zoox at less than the $3.2 billion lofty valuation affixed during the company’s last 2018 funding round.

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Founded in 2014, the technology provider has grown quickly but of-late, according to the publication, has struggled to raise additional funding. Reportedly, the acquisition will allow Zoox to continue development of its electrically powered robot taxi allowing Amazon the opportunity to deploy these vehicles.

Reuters reported that the deal provides Amazon the option to leverage either autonomous technology in either ride-hailing or in its own last-mile delivery network capabilities.

According to reporting by TechCrunch, the autonomous driving tech provider will continue to exist as a standalone business with current CEO Aicha Evans, previously an executive at Intel, continuing in her role, as well as CTO and co-founder Jesse Levinson. Tech Crunch further opines that with a deep-pocketed parent like Amazon, Zoox should be able to gain the runway it needs to keep up with its primary rival — Google’s Waymo. Further noted: “Zoox has chosen one of the most expensive possible paths in the autonomous driving industry, seeking to build a fit-for-purpose self-driving passenger vehicle from the ground up, along with the software and AI end to provide its autonomous driving capabilities.”

This investment follows a pattern of Amazon’s prior investments both in advanced purchase of 1000 self-driving delivery vans from start-up technology provider Rivian Automotive and in participation an investment self-driving car provider Aurora Innovation.

According to a past report from TechCrunch: “Aurora has never planned to operate a robo taxi service. Instead, it has focused on building the self-driving stack and working with partners to integrate into vehicle platforms. The “Aurora Driver,” as the company calls it, has been integrated into six vehicle platforms from several manufacturers, including sedans, SUVs, minivans, commercial vans and Class 8 trucks.”

Rivian announced in April that the provider was pushing back the release of its first two vehicles — an all-electric pickup truck and SUV to the year 2021, because of the ongoing pandemic. It remains unclear as to where the electric van development program tied to Amazon stands.

 

Supply Chain Matters Perspectives

Supply Chain Matters remains of the generally accepted view that these series of investments remain part of Founder Jeff Bezos’s pledge for the online retail platform provider to be carbon neutral by 2040. Investments have been driven by either attraction or making big bets on various underlying technology approaches, part may be the spirit of investment in a management team, and part may be the similarities to Tesla in tendencies to disrupt existing industry norms.

It is very evident that Amazon indeed has the deep pockets to bet on such various approaches in hopes that one will be the breakthrough. The acquisition of Zoox and its technology may not only lead to a ground-up fit-for-purpose taxi vehicle for widescale consumer use, but also for eventual logistics and last-mile parcel delivery use as well.

Where this leads to is indeed something to observe, as was Amazon’s original 2012 bet on warehouse autonomous robot provider Kiva Systems. Eight years later, that technology has now been widely deployed within Amazon’s various customer distribution centers.

 

Bob Ferrari

 

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