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This is an interesting purchase for Amazon on a number of levels. Obviously they have a huge delivery fleet that could benefit from self driving vehicles. And a

This is an interesting purchase for Amazon on a number of levels. Obviously they have a huge delivery fleet that could benefit from self driving vehicles. And a giant company like Amazon must love an opportunity with an enormous addressable market such as this one. But the timing is interesting too IMHO. Amazon played the long game a little bit here and waited until self-driving technology was in the "trough of disillusionment" [1] to pounce on a promising startup. It saved itself billions of dollars in the process, let some of the pretenders fade away, and gave itself better odds of success. Self-driving tech is still a slog though, and success is not guaranteed by any stretch. But I give them kudos for this. [1] https://www.gartner.com/en/research/methodologies/gartner-hype-cycle https://www.gartner.com/en/research/methodologies/gartner-hy...

rmason 6y ago
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/2020/05/26/carmakers-push-forward-evs-self-driving-hits-pandemic-speed-bumps/3077855001 https://www.detroitnews.com/story/business/autos/mobility/20...
- reitzensteinm 6y ago
  Why will Zoox under Amazon eat their lunch, but not as an independent company?
  - rmason 6y ago
    Because under Amazon funding will no longer be an issue. They will be able to install devices in Amazon's rather large fleet and gain millions of miles of experience on roads all over America. It will accelerate their development process significantly.
- FreedomToCreate 6y ago
  There are numerous Tier 1s (Bosch, Continental, ZF) working on providing autopilot like tech to auto manufacturers. Additionally companies have there own efforts (GM super Cruise for example which btw has nothing to do with Cruise and is developed separately). Comma has open sourced all there code, so good chance the OEMs have someone looking at it.
  - cyrux004 6y ago
    Apart from GM's supercruise which is only avaialable on a top end Cadillac CT6, there is nothing that rivals OP or AP. Telluride/Pallisade are good but not close to either of above products. Not sure whats holding manufacturers back
- taneq 6y ago
  I find it weird that they'd pose those two directions as opposites rather than as complementary tech.
smachiz 6y ago
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.
- toolz 6y ago
  It seems to me that we don't need to improve the tech at all. We just need some pragmatic infrastructure to support the existing tech.
  - csa 6y ago
    The government budget crisis that the pandemic will cause as tax receipts decrease and outflows increase might be a catalyst for this. I could see a big company or conglomerate of companies being willing to take over part or all of certain parts of road development and maintenance as long as they can have one or more dedicated autonomous lanes. I imagine that there will be a lot of room for creative solutions over the next 10 years.
    - eecc 6y ago
      That’s frankly dystopian. It’s much worse than deregulation; it’s the dissolution of a uniform state. A return to the Middle Ages, its warlords and its robber barons.
      - csa 6y ago
        > That’s frankly dystopian. It’s much worse than deregulation; it’s the dissolution of a uniform state. A return to the Middle Ages, it’s warlords and it’s robber barons. You just described my best guess of the future (at least of the US). In fact, you might be able to say that we are already moving that direction given how much influence large corporations and industries have over our government. Note that I am not happy about my prediction, but my eyes are open to what is happening around me.
    - 6y ago
paxys 6y ago
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.
- tech-historian 6y ago
  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.
  - kortilla 6y ago
    > 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.
    - jcampbell1 6y ago
      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.
      - sjg007 6y ago
        Why is it winner take all?

rmason 6y ago

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/2020/05/26/carmakers-push-forward-evs-self-driving-hits-pandemic-speed-bumps/3077855001 https://www.detroitnews.com/story/business/autos/mobility/20...

reitzensteinm 6y ago
Why will Zoox under Amazon eat their lunch, but not as an independent company?
- rmason 6y ago
  Because under Amazon funding will no longer be an issue. They will be able to install devices in Amazon's rather large fleet and gain millions of miles of experience on roads all over America. It will accelerate their development process significantly.
FreedomToCreate 6y ago
There are numerous Tier 1s (Bosch, Continental, ZF) working on providing autopilot like tech to auto manufacturers. Additionally companies have there own efforts (GM super Cruise for example which btw has nothing to do with Cruise and is developed separately). Comma has open sourced all there code, so good chance the OEMs have someone looking at it.
- cyrux004 6y ago
  Apart from GM's supercruise which is only avaialable on a top end Cadillac CT6, there is nothing that rivals OP or AP. Telluride/Pallisade are good but not close to either of above products. Not sure whats holding manufacturers back
taneq 6y ago
I find it weird that they'd pose those two directions as opposites rather than as complementary tech.

smachiz 6y ago

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.

toolz 6y ago
It seems to me that we don't need to improve the tech at all. We just need some pragmatic infrastructure to support the existing tech.
- csa 6y ago
  The government budget crisis that the pandemic will cause as tax receipts decrease and outflows increase might be a catalyst for this. I could see a big company or conglomerate of companies being willing to take over part or all of certain parts of road development and maintenance as long as they can have one or more dedicated autonomous lanes. I imagine that there will be a lot of room for creative solutions over the next 10 years.
  - eecc 6y ago
    That’s frankly dystopian. It’s much worse than deregulation; it’s the dissolution of a uniform state. A return to the Middle Ages, its warlords and its robber barons.
    - csa 6y ago
      > That’s frankly dystopian. It’s much worse than deregulation; it’s the dissolution of a uniform state. A return to the Middle Ages, it’s warlords and it’s robber barons. You just described my best guess of the future (at least of the US). In fact, you might be able to say that we are already moving that direction given how much influence large corporations and industries have over our government. Note that I am not happy about my prediction, but my eyes are open to what is happening around me.
  - 6y ago

paxys 6y ago

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.

tech-historian 6y ago
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.
- kortilla 6y ago
  > 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.
  - jcampbell1 6y ago
    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.
    - sjg007 6y ago
      Why is it winner take all?