Amazon's $25 Billion Robotics Push Targets Cost Savings, AI Growth And Temu Competition: Report

Zinger Key Points

Amazon invests $25B in robotics-led warehouses to cut costs and compete with rivals like Temu.
Amazon's AI-driven warehouse automation could save $10B annually by the decade’s end, says Morgan Stanley.
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Amazon.Com Inc AMZN remains invested in its multibillion-dollar robotics investment, which has the potential to generate near-term savings as artificial intelligence spending surges.

The e-commerce conglomerate committed up to $25 billion to its retail network, including investment in a new generation of robotics-led warehouses, to beat rivalry from low-cost rivals like China’s PDD Holdings Inc PDD Temu, the Financial Times reports.

Analysts estimate that most of Amazon’s planned $100 billion capital expenditure for 2025 will go towards expanding AI initiatives, and ~25% will go towards its e-commerce arm.

Also Read: Apple Commits $500 Billion In US Investment For AI Push, Boost US Manufacturing Tech

Amazon has already cut more than 27,000 jobs following the Covid-19 pandemic.

The focus on cost-cutting has also helped to accommodate investments in data center capacity in its competition against rivals Alphabet Inc GOOG GOOGL Google, and Microsoft Corp MSFT.

Morgan Stanley told FT that Amazon’s investments in robotics-led warehouses could generate about $10 billion in annual savings by the end of this decade.

Amazon is also investing in robotics talent as part of a broader push to deploy AI large language models in its warehouse robots.

The U.S. e-commerce giant is pushing to cut delivery times, particularly for users of its Prime subscription service. This includes separating its logistics network into specific regions.

Amazon has deployed more than 750,000 mobile drive units since it acquired robotic start-up Kiva Systems in 2012. The company’s Proteus is a fully autonomous lift vehicle that navigates sites leveraging a set of AI-trained sensors. The company has also partnered with chipmaker Nvidia Corp NVDA to develop “digital twins” of its warehouses.

Price Action: AMZN stock is up 1.05% at $215.04 premarket at last check Wednesday.

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