Amazon's Innovation Fund Expands Horizon - From Mantis Robotics to 'Last Mile' Delivery Investments

In a bid to enhance efficiency within its logistics network, Amazon.com Inc AMZN is set to intensify its investments in companies bridging the realms of artificial intelligence (AI) and robotics. 

Franziska Bossart, Head of the corporate venture capital arm established in 2022, highlighted generative AI’s pivotal role in the future of robotics and automation. 

Bossart asserted that Amazon’s $1 billion industrial innovation fund’s investment pace would notably escalate throughout 2024, building on its inaugural investment in a generative AI company last year, details of which remain undisclosed.

The industrial innovation fund, the Financial Times notes, has made a total of 12 investments, including in Mantis Robotics, and is strategically focusing on generative AI groups as part of a broader trend in the tech industry. 

Microsoft Corp MSFT pledged up to $13 billion to OpenAI, while Amazon independently committed up to $4 billion to generative AI start-up Anthropic. 

Beyond the fund, Amazon invested over €400 million in 2022 to advance technologies like industrial robotics and sorting systems in its European warehouses, deploying a substantial fleet of 750,000 mobile robots across its operational network.

Citing Bossart, the Financial Times report emphasized that the innovation fund is keen on supporting Amazon’s goals of increased efficiency, safety for associates, and faster customer deliveries. 

The fund’s expanded focus this year includes seeking investments in companies involved in the “last mile” of deliveries, geographical expansion, and later-stage enterprises. 

Despite concerns about job displacement, Bossart assured that the focus on automation is not about eliminating jobs but rather shifting roles, with robots taking on repetitive or hazardous tasks. She stated, “We’re also a long way off from replacing all humans.”

Amid Amazon’s push for greater automation, its investment arm’s announcement of increased capital deployment signals positive news for tech start-ups. 

The move aligns with the broader strategy to boost margins, following heavy investments in the logistics network during the pandemic. 

Amazon.com’s Stock Prediction For 2024

Amazon.com’s revenue growth in FY23 was 11.83%, reflecting the influence of various factors including the macroeconomic environment, demand for its products and services, and its position relative to competitors. This growth is a critical indicator for investors assessing the company’s future prospects.

Some macro factors that could impact the company's performance in the next year include higher interest rates, progress on reeling in inflation and labor market strength. The Fed's benchmark rate is currently at 5.33%, while PPI recently came in at 0.3%, growing 0.9% from last year. The unemployment rate was most recently reported as 3.7%.

An investor should pay attention to economic conditions to decide whether they think the macro environment is positive or negative for Amazon.com stock. For real time economic data and breaking market updates, check out Benzinga Pro. Try it for free.

How does this stack up against Amazon.com's peers?

Investors may also want to analyze a stock in comparison to companies with similar products or in similar industries. Amazon.com operates in the Consumer Discretionary sector. The stock has experienced average annual growth of 3.35% compared to the nan% average of its peer companies. This is below the broader sector movement of Amazon.com.

Price Action: AMZN shares are up 0.17% at $173.83 on the last check Wednesday.

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