Amazon To Buy Zoox For Over $1 Billion

Zoox autonomous vehicles parked
  • In May, The Wall Street Journal reported that Amazon was in talks to purchase autonomous-vehicle tech company Zoox.
  • The Information is reporting that both sides have agreed to the deal, worth more than $1 Billion and it could be announced as early as Friday.
  • This is not the only investment Amazon has made in autonomous-vehicle technology. In 2019, Amazon participated in Aurora’s $530 Series B funding round, a company that also is developing self-driving technology.
  • Update 6/26/20 | 9:55 am: Amazon confirmed the deal on a blog post highlighting ride-hailing.

Why This Acquisition Matters

Zoox has primarily focused on technology that could be used for ride-sharing, but there is a belief Amazon is interested in self-driving technology for its logistics operations.

Amazon has spent the last few years building a delivery network using contractors operating Amazon-branded vehicles. It has also expanded its air-cargo network and will soon open the company’s North American air hub at the Cincinnati/Northern Kentucky International Airport.

The company also has invested in robotic delivery projects such as Amazon Scout and has been at the forefront of developing drone delivery technology, especially after Amazon CEO Jeff Bezos unveiled the possibility of drone deliveries in the 2013 CBS 60 Minutes segment.

While it never can be ruled out that Amazon may have an interest in ride-sharing services to compete with Uber and Lyft, it seems unlikely considering the investment in its logistics operations and the challenges Uber and Lyft face, especially now during the coronavirus pandemic.

It would make more sense for Amazon to invest in technologies to offer on-demand local delivery services, such as grocery, restaurant and medical deliveries to complement its long-haul and parcel delivery network. Not to mention the self-interest to use autonomous vehicles for Whole Foods Market and Amazon Fresh grocery on-demand deliveries.

For Amazon, self-driving technology will play an essential part as it continues to expand its logistics operations and potentially seek new disruptive services that complement or add to its operations. The acquisition of Zoox should help the company rapidly grow in this area and lead to more innovative services by Amazon.

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