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Comment by paxys | Hacker News Reader

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.

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> how far behind they are from competitors like Google

Zoox run their tests in San Francisco, a city known for chaotic traffic conditions. They do so rather successfully (see their YouTube videos). This accomplishment alone means they are not really "far behind".

I think far behind is in reference to Amazon.

I live in San Francisco in a particular neighborhood where there is a large amount of self driving cars being tested. I assure you, none are ready for prime time. I had one almost drive directly into me last week but I saw the operator take control of the wheel urgently.

>They do so rather successfully (see their YouTube videos).

Well I wouldn't expect them to post Car Crash Compilations of their own making.

Doesn't SF have wide, neatly planned streets and great weather all year? I can't imagine these cars driving on some narrow European roads from the medieval times in the winter

No. and No. Unless you include fog and rain as great weather.

San Francisco is one of the oldest cities in California, as such, the city layout is largely from the pre-automobile days.

https://www.google.com/maps/place/San+Francisco,+CA,+USA/@37...

A look at google maps shows the city is splits in large perfect squares of roads themselves split in smaller squares. It's typical US modern layout, the antithesis of European layout.

Most of the US is definitely very regular, the exception being Boston. There was an interesting article about city street orientations.

https://geoffboeing.com/2018/07/comparing-city-street-orient...

I would consider it somewhere in between the grid of Manhattan and the winding chaos of Boston. There are definitely fewer weather events. I don't any single self tech could successfully navigate snow.

Chaotic??? You haven't traveled much I guess.

I'd love to see a self driving car attempt India or Viet Nam.

It would hilarious to see the first cases of PTSD in AI.

In raw tech for "self-driving car" Amazon does not have the expertise or personnel, but they have wider transferable experience in cultivating the R&D of such a project what with their dabbling with SLAM-driven drones and their work in robotics.

So they're not starting from zero + a speculative acquihire if that makes sense, at least in my opinion

Disagree. The future of self driving is not in self driving cars, but rather in self driving deliveries.

https://techcrunch.com/2020/04/07/nuro-gets-ok-to-test-its-d...

Zoox is in prime position to be a better nuro

I don't know about the last mile in deliveries, but self-driving logistics seems like a sure bet.

Interesting, rather than 1 employee driving 1 van, the same employee could command/oversee N number of self-driving deliveries. Self-sanitizing machine would also ensure "contact-less" delivery.

Certainly nothing brilliant about the acquisition. I'm with you there. It's just an M&A deal. But considering the (relatively) cheap price, there's a chance it eventually pays off to be a transformative catalyst for the business.

Amazon's market cap is currently $1.2 trillion. If they spent $2.5B to acquire zoox, that is only 0.2% of market cap. Not a bad risk/reward ratio.

> Not a bad risk/reward ratio.

Hard to tell since you haven’t defined any particular reward. Keep in mind the risk/reward ratio for a particular investment would be the same regardless of the percentage it made up of the larger portfolio.

Self driving software will be winner takes all, or a maybe two companies will sell software. Pretty easy to see 20M units/year at $5000 each, so call it 100B in revenue per year with profit margins of 50%. The winners will likely see close to a trillion increased valuation. There is a natural monopoly for the first successful movers.

As a side note, risk/reward ratio is the same, but when making bets with positive expected return, you must consider bankroll size and risk of ruin. The VCs are realizing they can’t play a $300M/year game where the probability of winning is 20%, even though the expected return is 100x.

Why is it winner take all?

First mover advantage snowballs: real-life client deployments increase the miles driven hundredfold and the revenue increases the resources devoted to mapping and to fix rare situations with manual fixes to either maps or AI.

The behemoth company with custom mapping of every road in your country and manual remapping of construction sites will provide a far better experience than the scrappy AI start-up. (And they can probably leverage that to gain better insurance rates, or to get driving licences in places where second movers can't.)

This doesn't mean that self driving is a winner take all market.

It does mean that buying the alternative will usually be a "crappy" choice. Leaving the incumbent with the ability to charge a margin and hire better devs. There will be other players who are competitive locally, or provide "good enough" solutions for some customers.

* Assuming any player finds a viable business model, and that our current understanding of ML, Computer Vision, and control systems is sufficient to produce a commercially viable product.

Why? I am sure self-driving will have regulations around it for specific performance guarantees.

I think that's where "good enough" comes in. It's likely that some companies will be just compliant, whereas the market leader is well ahead of compliance. e.g. a car that safely comes to a stop in an unhandled situation vs. a car that can handle the situation. It's also possible that the space also reaches commodity status where no differentiators emerge ( as one would expect with a big S curve in performance ).

Then Tesla already won because they have the most miles/data? Doesn’t seem sound.

Will a good demo of self-driving increase Amazon's stock by more than 0.2% ?

That's enough to justify the purchase.

"transformative catalyst for the business" is the reward, for a tiny risk of 0.2% market cap.

> Considering how far behind they are from competitors like Google

Why do you say that?

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