Amazon will invest in startups that combine AI with robotics – 02/29/2024 – Tech

Amazon’s $1 billion industrial innovation fund will step up investments in companies that combine artificial intelligence and robotics as it seeks to improve the efficiency of its entire logistics network.

Franziska Bossart, head of the corporate venture capital arm created in 2022, told the Financial Times that “generative AI has a lot of potential for robotics and automation” and is an area “we will focus on this year.”

She added that the fund’s investment pace will “absolutely” accelerate in 2024. It made its first investment in a generative AI company last year, details of which were not disclosed.

Amazon’s industrial innovation fund has made 12 investments in total, including in Mantis Robotics, which is developing a robotic arm that uses sensors to work alongside humans.

The fund’s search for new investments in generative AI groups comes as big tech companies pump billions into developing the technology, which can produce human-like text, images and programming code in seconds.

Microsoft has committed to investing up to US$13 billion in OpenAI, incorporating the ChatGPT owner’s technology into its Office suite and the Bing search engine.

On Monday (26), Microsoft announced that it made an investment in French AI startup Mistral. Separately from its innovation fund, Amazon has committed to investing up to $4 billion in generative AI startup Anthropic.

Amazon has innovated in robotics before: in 2022, the company said it had invested more than 400 million euros in technologies including industrial robotics and sorting systems in its European warehouses. The company has deployed 750,000 mobile robots across its operations network.

The industrial innovation fund seeks to invest in startups that can support the group’s goals of becoming “more efficient, safer for our partners and increasing delivery speed for our customers,” Bossart said.

She said Amazon’s fund will broaden its focus this year, including looking to invest in companies involved in the “last mile” of deliveries, when packages reach customers, as well as companies in more advanced stages of logistics.

However, Bossart did not say how much the fund has invested so far, declining to comment on the report which claims it had invested US$110 million as of June.

The focus on automating warehouses and logistics is not about eliminating people from them completely, but it will result in a “job shift” as more robots and automated vehicles take on repetitive or dangerous tasks, he said.

“We are also far from replacing all humans,” he added.

While Amazon’s push to use AI to increase automation may raise concerns among the company’s thousands of delivery drivers and warehouse workers around the world, the announcement that its investment arm will inject more capital this year could cheer tech startups. .

Venture capitalists have resisted new bets on startups during a recent technology downturn and have instead focused on propping up existing companies in their portfolios or groups that can demonstrate profitability.

Amazon’s desire for greater automation and efficiency in its supply chain is also part of a broader strategy to increase profit margins after a period of heavy investment in its logistics network during the pandemic.

A recent effort to “regionalize” the US network meant products could be stored closer to customers, making deliveries faster and cheaper, Amazon said in February.

But there are still areas “where we believe we can reduce costs while delivering faster to customers,” said CEO Andy Jassy.