Amazon in advanced talks to buy Zoox

Sadly Detroit's Big 3 announced that they believe electric cars are the next big thing so they're cutting back on research for autonomous cars. They're blaming it all on the pandemic. I said publicly that Tesla and Comma.ai would eat their lunch. Now I can add Amazon to the list!

https://www.detroitnews.com/story/business/autos/mobility/20...

Yeah... except this is more complex than Gartner's hype cycle captures. This isn't k8s or openstack.

There are real technical challenges to making this work, not that it doesn't magically solve all things - it can't solve anything yet. The long tail still appears quite long.

Considering how far behind they are from competitors like Google, I wouldn't exactly call it a winning strategy. And they are going to spend billions on the acquisition anyways, regardless of how good or bad the technology is. To me this move seems more like desperation than brilliance on Amazon's part.

I do wonder if they've been positioning for an exit and that this is all the fruit of that.

These risks are the same as for any tech startup company. Many people have made a similar gamble with equity. And in the meantime, salaries for AV software developers, machine learning engineers are not exactly below market.

That's how startups go.

If you want certainty and no chance of winning big, join a Fortune 500 company. If you want uncertainty and a small chance of winning big, join a startup.

For the engineers, they wouldn't likely win big on a sale below a certain value, but that doesn't make it a total loss. They'll have a job at a FAANG with likely a higher total comp than before. Replace stock option lottery tickets with regular RSU dumps at a decent paycheck.

I was under the impression that freeways were the easiest target for self driving. The lack of pedestrians, bicycles and unprotected left turns makes it much more predictable. It's hard for humans because the speed is much faster than human reaction time evolved for, but that's not as much an issue for self driving. Tesla for a very long time only supportted self-driving on freeways.

Neighborhoods are the complicated parts: they're filled with pedestrians, cyclists, kids, animals, and uncontrolled intersections.

AFAICT, a self driving car has to pretty much assume that every pedestrian might suddenly dart into traffic, it can't really tell the difference between a normal pedestrian and a drunk heads down in their phone.

But keeping speeds below 20mph opens up a lot of opportunities simply because stops are basically instantaneous at that speed and because car-pedestrian collisions under 20mph are almost never fatal.

As much as a technology or retailer company, Amazon is a logisitics company and they are buying a logistics technology that may drive down their delivery costs in an extreme way.

Amazon can use this technology entirely in-house.

My take about Amazon interested in this is that in a giant list of AWS offerings, there will be a sensor suite processor service called SDS (Self Driving Suite) which will be installed physically inside the car as a server box. Amazon AWS has some experience in building hardware, AWS Snowball for e.g. Ofcourse it will communicate over 5G for non-immediate processing and will run through 3 intermediate AWS services before running the actual processing job on EC2 instance. One of them being SFS or Sensor Fusion Service, which combines geospatial data (from AGS + IPS) with up-to-date road data from other SDS equipped vehicles(1). The billing will be a bit complex so it will require ABS to optimize the billing based on location, mileage and other AI-driven metrics.

(1) Inbound bandwidth will be free.

>Are they trying to pivot into being car manufacturing companies?

Is Amazon, a company worth 1.4T dollars, trying to "pivot" into a car manufacturer? Seems unlikely, no?

Amazon has a massive logistics and delivery operation. I imagine any automation there will yield great returns.

There are plenty of non-car companies that make components for the industry.

Amazon is now a major shipping and delivery company, in addition to everything else (as of last year, they were apparently delivering half of their packages themselves [0]). My guess is they would like to automate that.

[0] https://www.vox.com/recode/2019/12/19/21029932/amazon-logist...

They started out as a book seller. Now they sell everything. They are a movie studio. They are a shipping company. I think Bezos has grand ambitions.

You mean like open pilot ? https://comma.ai/

autonomous delivery vehicles

Imagine Amazon with a radically different UI: a physical store on wheels that automatically stocks itself with products you’re likely to buy and then drives itself to your house. You go inside and take what you want; then the vehicle returns to base and stocks itself for the next customer.

I want that.

Probably because the hardest part of a self driving car is the self driving part and not the car part.

Amazon previously purchased Kiva for their warehouse robotics systems [1]. It's safe to assume that Amazon wants to extend that out to the delivery side as well.

1 - https://pitchbook.com/news/articles/ma-flashback-amazon-anno...

Dark horse suggestion: Patent portfolio. It’s possible that self-driving implementations will be patent encumbered, so they’re actually buying leverage to keep the fees reasonable.

In Amazon's case they are a major investor in Rivian, an electric truck company that they are reported to be buying 100,000 electric delivery vans from over the next decade.

Ford another major Rivian investor has partnered with and invested in autonomy startup Argo AI

Rivian has said that their vehicles will have level 3 autonomy but if you look at the sensors the vehicles will include they would probably could be level 5 capable with the right software. Perhaps both Amazon and Ford are planning on bringing their own software to run on Rivian's hardware to turn the stock Rivian into a level 5 vehicle? It seems like it could be a smart play since the autonomy software will probably be the highest margin part of the vehicle.

Well Amazon has several business units that could probably do something productive with this. The obvious one is of course their delivery fleet, which at some point will start benefiting from autonomous driving. We're talking about a logistics operation that is large enough that they operate their own planes and airports.

Then there's AWS, which is also used for machine learning and other purposes. I imagine this company has a lot of the right kinds of skills they'd want to tap to offer off the shelf solutions in that space. Even if they'd ditch the product that could be valid.

But of course these solutions include bespoke self driving solutions for those car manufacturers needing to catch up in a hurry. They are going to spend billions doing so and that are going to be in need of exactly the kind of services and scale that AWS provides. IMHO most of them are going to not succeed with in house solutions and are going to be looking for something off the shelf. At least, I don't see the likes of Kia, BMW, Chrysler, etc. turning into the type of software companies that can actually do this half decently any time soon. So, that means AWS offering all or most of this as a service sounds like a good idea.

Of course the theory and practice of acquihires are two things. Most of them flat out fail and are nothing more than a big corporation scratching the backs of investors (e.g. on their board) by bailing out their failed investments. A lot of exits in the startup space fall in this category. Investors hate having their investments go bankrupt. An acquihire you can still spin as a success. A bankruptcy is much harder.

The automotive industry has plenty of OEM suppliers for various vehicle components, so there would be nothing unusual about a third party company providing self-driving hardware and software for traditional manufacturers' cars.

>Can someone explain why non car companies are buying self driving car tech?

Because warehouses and the freight terminal (truck terminal in the consumer goods case) that necessarily surrounds them have a need for things that can roll around autonomously while not colliding with things.

There are existing solutions for this but they're far behind the state of the art for self driving vehicles that aim to eventually be used on public roads and they have several weak points that make them less competitive in very dynamic warehouses (variable contents and throughput, as opposed to a warehouse that feeds a manufacturing operation which will have more fixed contents and less variable output) that mostly handle lightweight goods (which is part of why amazon uses so much human labor in its warehouses). I wouldn't be surprised if Amazon was trying to scoop up Zoox on the cheap for their own internal use. They already bought a warehouse automation company. The probably have a list of things they want to automate and figure that buying a company that already has competence in the space (even if they're not a front runner) is the best way to meet their needs.

Of course the delivery network serving the area surrounding the warehouse facility can also make use of self driving tech but self driving on public roads is a much harder and farther off problem and I don't think solving it is their primary goal for this purchase.

3.2B was a pretty wild valuation though...

That doesn’t necessarily mean that investors or founders lose money. The investors could get a liquidation preference and the founders still become hundred millionaires.

Depends if they'll give you equity as part of the comp with an acceleration clause. If so, congrats on your lottery ticket.

As my uncle used to say, you can marry more money in a moment than you can make in a lifetime.

But isn't a driver still necessary for moving packages form the van to a home/business?

You have to remember it's a completely different situation for companies like Amazon, Cruise versus Rivian, Tesla etc.

The former has a restricted use case. Specifically, driving around specific suburban cities where if conditions are bad or issues are found they can easily just fall back to human drivers.

The latter is trying to do self-driving under all conditions, all scenarios and where it's much harder for Rivian/Tesla to determine if it's safe or not to use self driving.

At least Jesse is quite accomplished. Some of Qualcomm's lesser-known acquisitions are c-suite's bailing out family.

As someone who used Chime, their conferencing service, anything would be an improvement.

(IANAL)

If bought at 1B, which is roughly the amount of VC money they took, the employee pool will be roughly worthless.

Zero chance. Less than zero chance.

Companies don't make billion dollar purchases with no due diligence with just one person involved in making the decision. And they don't buy companies just to immediately write them down.

Amazon is one of the most successful companies in the world. They didn't get there by acting like children.

They might be thinking in terms of automated delivery vehicles.

Amazon doesn't operate like that as a business. They make intentional and calculated decisions especially when $$ is concerned.