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Amazon In Talks To Buy Self-Driving Tech Company

Amazon is negotiating to buy autonomous vehicle startup Zoox at a much lower price than a previous valuation of the company, a move that would expand the retail giant's footprint in AV tech.

A sale to Amazon would value Zoox at less than the $3.2B that a 2018 funding round valued the company, the Wall Street Journal reports, citing anonymous sources but not specifying an exact sale price. Zoox has raised $1B in equity thus far and recently started exploring a sale.

An AV being tested on the streets of San Francisco.

Such a valuation might reflect the fact that AV tech isn't quite the hot ticket it was a few years ago.

Zoox was founded in 2014, promising a business model of robot taxis that could be ordered via smartphone but without a driver. The company has since tested its AVs in San Francisco, but the system hasn't been rolled out for wider use or research.

Overall, AV tech isn't progressing as quickly as boosters predicted during the 2010s. Fundamental capabilities for such systems, such as building vehicles controlled by artificial intelligence that consistently respond safely to real-world road conditions, are still beyond engineers' design abilities.

Amazon is no stranger to the development of self-driving tech, which it is pursuing in part to facilitate more control over the delivery of the goods it sells. Last year, Amazon participated in a $530M round of funding for AV tech company Aurora Innovation, though the size of Amazon's total investment during that round wasn't released, CNN Business reports.

Also in 2019, Amazon started testing small delivery robots in Washington state. The devices, called Amazon Scout, roll along sidewalks at a walking pace. Since then, the company has also tested the robots in California, and recently Virginia lawmakers approved a bill to allow their use in the commonwealth. 

Though AV technology hasn't been progressing quite as quickly as predicted, the prospect of cost savings in the future still entices deep-pocketed investors like Amazon to press forward with investments. In 2018, McKinsey & Co. predicted that AVs used for deliveries will eventually allow retailers to cut shipping costs by as much as 40%.

Amazon’s shipping costs might reach $90B/year eventually, Transport Topics reports, citing Morgan Stanley analysts. Autonomous vehicles could save the company more than $20B annually, they estimate.