Amazon just warned Tesla. Last month, Amazon announced an unexpected and successful new acquisition: it’s buying Zoox, a $1.2 billion start-up of self-driving cars.
Amazon’s unexpected resolution caught the attention of Tesla CEO Elon Musk. Immediately after the deal, he jokingly called Amazon CEO Jeff Bezos a “imitator.”
The apparent question here is: why does Amazon travel in cars? As I’ll show you, this has a million-billion-dollar ratio. This is something that smart-generation investors pay close attention to.
Amazon has acquired Zoox for its crown jewel: its high-end PC vision technology. Computer vision is one of the greatest opportunities to make money.
In short, complex computers can now “see” and visually process more than a human. It’s a basic game-changing technology, just like the PC, smartphone and Internet were basic technologies.
In other words, computer vision is the foundation on which tomorrow’s most attractive technologies will be built. This will bring us drone delivery networks, much more effective and fitness systems, authentic autonomous vehicles.
Zoox is one of the few corporations that dominates this new technology. Zoox cars roam the bustling streets of Las Vegas almost every day. They enter and leave the busy areas of attention of the hotel … move through the areas of the structure … and mix with high-speed traffic. And the human “safety driver” doesn’t have to touch the guide wheel once!
Zoox’s high-resolution “eyes” recognize everything around them. They bump into cars on the other side of the road, see the color of traffic lighting devices and stick to pedestrians on the side sidewalk.
For example, when he sees an ambulance with his sirens, he knows he will possibly have to prevent it and let it pass. Here’s how Zoox cars “see” a busy street:
Zoox’s purpose has been to expand its own ‘robotaxi’ network. He sought to make a self-driving car from scratch. Its prototype looks like this:
Zoox suspended its IPO plans in May and sought out a buyer. Then came Amazon …
I am convinced that Amazon will integrate Zoox PC vision generation into its delivery trucks as soon as possible. In its inception, Amazon relied heavily on other corporations such as FedEx (FDX) for deliveries.
But Amazon has taken over deliveries and eliminated intermediaries. Last year, Amazon delivered about 3.5 billion packages. By 2022, you’ll likely deliver more packages than FedEx and UPS (UPS) together!
Moving all this is very expensive. Amazon’s fleet of more than 20,000 trucks is developed month by month. And paying the truckers to drive them is a big expense. Amazon is looking to particularly reduce those expenses with trucks driving alone. In fact, Amazon has already started shipping autonomous trucks to ship goods on I-10 connecting California to Florida.
According to the Financial Times, Amazon will allow Zoox to function as an independent subsidiary. This tells me that the acquisition is just a logistics game for Amazon. Amazon intends to compete with other self-driving car heavyweights such as Waymo, owned by Google. And Tesla (TSLA).
Most people know Tesla as the world’s largest electric car manufacturer. In fact, it recently surpassed Toyota as the consistent period of the world’s most valuable automakers. Your inventory is now quoted at more than $1,200 in line with the stock. But Tesla is also an undisputed leader in self-driving cars. Their cars traveled 3.3 billion kilometers in “fully autonomous” mode.
The stakes are high. Every year, other people spend about $5 trillion on land transportation. Therefore, the company that dominates this area can raise billions or even a trillion dollars to its market value.
For now, it’s too early to say who will emerge victorious. But I’m intrigued by Amazon, which has an impressive track record of invading and then dominating new markets. After all, a dominant position has been built in online grocery shopping, home grocery shopping, cloud computing, smart speakers and video game streaming.
Now that it comes with Zoox’s PC vision generation, could the self-driving cars be the following? One thing is for sure: the winner will be the company that manages to take the generation of the “PC vision” to the next level.
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I am a founding spouse and CEO of RiskHedge.