Last week Amazon confirmed the rumors about the acquisition of Zoox, which “from scratch” developing Autonomous driving technology. Experts point to potential large savings for logistics network Amazon, but I assume that the company will have to spend about $2 billion a year to bring the technology to market, Zoox.
Amazon shares (AMZN), which grew by 45.7% year to date, increased by 2.24% on Friday after the announcement of the acquisition of six-year-old California startup Zoox.
Rumors about the acquisition appeared last month, the media pointed to the involvement of the leadership Zoox investment Bank Qatalyst Partners to assist in finding a potential buyer.
The company did not disclose the amount of the transaction, but it is assumed that the purchase cost Amazon about $1 billion. Marketinfo.pro wrote more about this in the article “Amazon in talks to purchase the startup’s Autonomous driving Zoox“.
In December 2018 startup Zoox was the first to receive approval for the provision of Autonomous driving in California, and was valued at $3.2 billion.
“Zoox started its activity in 2014 with the idea of creating specially designed vehicles with zero emissions, designed for Autonomous driving, as well as a comprehensive software package of the autonomy”, – stated in the press release companies.
According to analysts, the acquisition of Autonomous driving technology Zoox logical, given the efforts of Amazon to improve manufacturability and minimize costs of its logistics network. Last year, Amazon has already signed a major agreement with a manufacturer of electric vans Rivian. Now, with the development of technology Zoox, Amazon can integrate it into your fleet of cars.
Under the leadership of the Amazon, the Zoox team will get more resources for development, given the strong financial position and a large number of experts who are already working on technologies of artificial intelligence and robotics in units Amazon.
According to a press release, executives Zoox (Gen. the Director of the Eich Evans, Jesse Levinson, co-founder of Zoox and CTO), will continue to lead his business as an independent composition in the Amazon.
The development of such AI technologies such as Autonomous driving, requires a lot of costs that go only very large companies, among them we can mention the parent company Google Google (GOOGL,GOOG) with its subsidiary, the Autonomous taxi Waymo. The industry also provides examples of partnership, as Mercedes-Benz and NVIDIA (NVDA).
Among those who have a few years to develop the technology of Autonomous cars companies such as GM Cruise (GM), Uber (UBER), Tesla (TSLA) and Ford (F).
Experts point out that Amazon will have to invest a lot of spending about $2 billion a year before the technology reaches Zoox development – sufficient to obtain regulatory approval for its appearance in a car on public roads.
Katrin Zimmermann, managing Director of TLGG Consulting, agrees with this assessment and added that last year in the Autonomous automobile market attracted investments of $33 billion.
The expert predicts that Amazon will probably have to invest 10 times more than the purchase price, before the technology Zoox is ready for release.
To complete the transaction and Amazon Zoox will require regulatory approval, which could potentially be delayed. Amazon has long been experiencing the scrutiny of various state services and the Antimonopoly bodies, – the current transaction can not be an exception, and to draw attention from lawmakers and criticism from competitors.
Last week, Needham analyst Laura Martin, discussing the rating of “buy” and target price to $3,200 of shares of Amazon, said that the company’s shares have growth potential of up to $4500 – $5000.
Source:
CNBC
