
Amazon in advanced talks to buy Zoox - jmsflknr
https://www.wsj.com/articles/amazon-in-advanced-talks-to-buy-self-driving-car-tech-company-zoox-11590538611
======
tech-historian
This is an interesting purchase for Amazon on a number of levels. Obviously
they have a huge delivery fleet that could benefit from self driving vehicles.
And a giant company like Amazon must love an opportunity with an enormous
addressable market such as this one.

But the timing is interesting too IMHO. Amazon played the long game a little
bit here and waited until self-driving technology was in the "trough of
disillusionment" [1] to pounce on a promising startup. It saved itself
billions of dollars in the process, let some of the pretenders fade away, and
gave itself better odds of success.

Self-driving tech is still a slog though, and success is not guaranteed by any
stretch. But I give them kudos for this.

[1] [https://www.gartner.com/en/research/methodologies/gartner-
hy...](https://www.gartner.com/en/research/methodologies/gartner-hype-cycle)

~~~
paxys
Considering how far behind they are from competitors like Google, I wouldn't
exactly call it a winning strategy. And they are going to spend billions on
the acquisition anyways, regardless of how good or bad the technology is. To
me this move seems more like desperation than brilliance on Amazon's part.

~~~
smilekzs
> how far behind they are from competitors like Google

Zoox run their tests in San Francisco, a city known for chaotic traffic
conditions. They do so rather successfully (see their YouTube videos). This
accomplishment alone means they are not really "far behind".

~~~
enlyth
Doesn't SF have wide, neatly planned streets and great weather all year? I
can't imagine these cars driving on some narrow European roads from the
medieval times in the winter

~~~
mrunkel
No. and No. Unless you include fog and rain as great weather.

San Francisco is one of the oldest cities in California, as such, the city
layout is largely from the pre-automobile days.

~~~
user5994461
[https://www.google.com/maps/place/San+Francisco,+CA,+USA/@37...](https://www.google.com/maps/place/San+Francisco,+CA,+USA/@37.7515096,-122.4690227,13z/)

A look at google maps shows the city is splits in large perfect squares of
roads themselves split in smaller squares. It's typical US modern layout, the
antithesis of European layout.

~~~
plopz
Most of the US is definitely very regular, the exception being Boston. There
was an interesting article about city street orientations.

[https://geoffboeing.com/2018/07/comparing-city-street-
orient...](https://geoffboeing.com/2018/07/comparing-city-street-
orientations/)

------
Gatsky
I recall Zoox dumped their CEO founder quite suddenly, this announcement
reminded to look up the story. Food for thought re founders and controlling
stakes in startups.

[https://www.smh.com.au/business/companies/why-self-
driving-c...](https://www.smh.com.au/business/companies/why-self-driving-car-
company-pulled-the-brake-on-ceo-20180923-p505gh.html)

~~~
socceroos
I do wonder if they've been positioning for an exit and that this is all the
fruit of that.

------
ss45
Employees will make peanuts to nothing if Zoox gets sold for < 3.2 billion.
This will make many folks who work at Zoox very unhappy esp with the amount of
stress that engrs are taking every day. I hope engrs make some money here
otherwise bye bye loyalty.

~~~
mabbo
That's how startups go.

If you want certainty and no chance of winning big, join a Fortune 500
company. If you want uncertainty and a small chance of winning big, join a
startup.

For the engineers, they wouldn't likely win big on a sale below a certain
value, but that doesn't make it a total loss. They'll have a job at a FAANG
with likely a higher total comp than before. Replace stock option lottery
tickets with regular RSU dumps at a decent paycheck.

~~~
kingkong9
It seems like you are agreeing with previous post that engineers will leave as
they may not get enough.

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losvedir
Wow, I never thought about it before but partial self-driving assistance makes
a lot of sense for deliveries.

I live in a pretty quite neighborhood in a suburb of Chicago and I see Amazon
Prime vans drive by all the time. The driver parks, hops out, runs around to
grab the package, drops it off, drives on, and repeat.

This is a great scenario where you don't need _total_ autonomy all the time:
the delivery person could drive the highways and complicated parts, and then
when there's a cluster of deliveries where the speed limit is 25mph and the
roads are clear and regular, the van could go from house to house, with the
delivery person hanging out in back or something.

It's not full self-driving, but it seems like it could make deliveries a
little more efficient.

~~~
bryanlarsen
I was under the impression that freeways were the easiest target for self
driving. The lack of pedestrians, bicycles and unprotected left turns makes it
much more predictable. It's hard for humans because the speed is much faster
than human reaction time evolved for, but that's not as much an issue for self
driving. Tesla for a very long time only supportted self-driving on freeways.

Neighborhoods are the complicated parts: they're filled with pedestrians,
cyclists, kids, animals, and uncontrolled intersections.

AFAICT, a self driving car has to pretty much assume that every pedestrian
might suddenly dart into traffic, it can't really tell the difference between
a normal pedestrian and a drunk heads down in their phone.

But keeping speeds below 20mph opens up a lot of opportunities simply because
stops are basically instantaneous at that speed and because car-pedestrian
collisions under 20mph are almost never fatal.

~~~
computerphage
"Results show that the average risk of severe injury for a pedestrian struck
by a vehicle reaches 10% at an impact speed of 16 mph... The average risk of
death for a pedestrian reaches 10% at an impact speed of 23 mph" [1]

But, importantly, that's for human drivers, who are probably braking when, or
at least after, the collision occurs. An AV that completely fails a detection
wouldn't necessarily even try to stop.

[1] [https://aaafoundation.org/impact-speed-pedestrians-risk-
seve...](https://aaafoundation.org/impact-speed-pedestrians-risk-severe-
injury-death/)

------
nojito
Everyone in this thread is so focused on self driving cars and yet they are
ignoring the possibility of self driving deliveries.

[https://techcrunch.com/2020/04/07/nuro-gets-ok-to-test-
its-d...](https://techcrunch.com/2020/04/07/nuro-gets-ok-to-test-its-
driverless-delivery-vehicles-on-california-public-roads/)

------
saos
Also note that Amazon are awaiting clearance of $500m funding for Deliveroo
(UK food delivery).

[https://www.gov.uk/government/news/cma-provisionally-
clears-...](https://www.gov.uk/government/news/cma-provisionally-clears-
amazon-s-investment-in-deliveroo)

Just how many acquisitions and fundings have they provided this year?

------
true_religion
Can someone explain why non car companies are buying self driving car tech? Do
they think they will end up with some sort of kit they can just attach to
existing cars? Are they trying to pivot into being car manufacturing
companies? Or is this just a play to develop the AI then sell that to someone
else?

~~~
necubi
Amazon is now a major shipping and delivery company, in addition to everything
else (as of last year, they were apparently delivering half of their packages
themselves [0]). My guess is they would like to automate that.

[0] [https://www.vox.com/recode/2019/12/19/21029932/amazon-
logist...](https://www.vox.com/recode/2019/12/19/21029932/amazon-logistics-
delivery-network-fedex-ups-usps)

~~~
mabbo
Delivery is a huge portion of Amazon's costs, and most of that cost is the
last mile of the delivery. What are the biggest costs of last-mile delivery?
Human labor costs and fuel. What's Amazon putting money into? Self-driving
vehicles (less human labor time) and electric vans.

Bias note: I work for Amazon, but not in that department.

------
kyle_morris_
archive: [http://archive.is/evYQ7](http://archive.is/evYQ7)

 _The companies are discussing a deal that would value Zoox at less than the
$3.2 billion it achieved in a funding round in 2018, according to people
familiar with the matter._

~~~
smachiz
3.2B was a pretty wild valuation though...

~~~
wiredone
Even moreso now After a few years we all know we’re not as close as we all
thought to having a car without a steaming wheel.

~~~
throwaway573727
I for one will miss the days of both driving around and enjoying a good sauna.

------
awjfowiefj
I was just about to accept a job offer from Zoox. I'm going to have to rethink
that now.

~~~
toomuchtodo
Depends if they'll give you equity as part of the comp with an acceleration
clause. If so, congrats on your lottery ticket.

As my uncle used to say, you can marry more money in a moment than you can
make in a lifetime.

~~~
iav
If it’s stock options at the last round valuation then they will be worthless.
In theory the 409A valuation should be adjusted but in practice it’s most
likely still at the 2018 round value.

~~~
toomuchtodo
I’m just saying asking is free. Better to have the conversation than regret.
The worst that happens is OP is told no and/or the equity is worthless and
moves on to a better opportunity.

------
wmf
Amazon is buying 100K custom delivery vans so integrating self-driving is a
logical step. They can even use existing delivery routes to map out a city
before turning on autonomy. [https://electrek.co/2020/02/06/rivian-amazon-
electric-delive...](https://electrek.co/2020/02/06/rivian-amazon-electric-
delivery-van-closer-look/)

~~~
postingawayonhn
But isn't a driver still necessary for moving packages form the van to a
home/business?

~~~
tech-historian
Yes, that is a critical step, of course. But the "last mile" problem is only a
part of the logistics business. Trucks drive loads of packages between
warehouses/fulfillment centers before being placed on smaller vans for home
delivery.

------
justicezyx
It'll be interesting to see what the price ends up to be.

With Rivian already get investment from Amzn, the picture of autonomous &
electric delivery vehicle can be quite appealing.

I guess the price would reflect how eager is Amzn to implement that strategy,
and how realistic they think about the roadmap.

~~~
threeseed
You have to remember it's a completely different situation for companies like
Amazon, Cruise versus Rivian, Tesla etc.

The former has a restricted use case. Specifically, driving around specific
suburban cities where if conditions are bad or issues are found they can
easily just fall back to human drivers.

The latter is trying to do self-driving under all conditions, all scenarios
and where it's much harder for Rivian/Tesla to determine if it's safe or not
to use self driving.

------
person_of_color
I actually thought Art Levinson would bail out his son!

~~~
organicfigs
At least Jesse is quite accomplished. Some of Qualcomm's lesser-known
acquisitions are c-suite's bailing out family.

------
vetler
Their YouTube videos are just amazing to watch:
[https://www.youtube.com/channel/UCh5q-FtihPqzTbgEkZQRy3g](https://www.youtube.com/channel/UCh5q-FtihPqzTbgEkZQRy3g)

------
presiozo
I guess they are playing for a portfolio approach. With investments in a bunch
of different companies, in-house drones, and robotics research. Very
interested in how they integrate them into Amazon, if at all.

------
sidcool
I feel it was only a matter of time. Amazon is competing on every front. And
any transportation initiative would be core to their business. I won't be
surprised if they bought an airplane company.

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baxtr
For a moment I read "Zoom" :D Would probably also make sense for amazon since
they offer everything these days.

~~~
arusahni
As someone who used Chime, their conferencing service, anything would be an
improvement.

------
mkchoi212
Am I the only one that read this as “in advanced talks to buy ZOOM”? I almost
freaked out when I thought I read that..

------
person_of_color
Congrats to Zoox! What kind of exit would an L3/L4 engineer make here?

~~~
smilekzs
(IANAL)

If bought at 1B, which is roughly the amount of VC money they took, the
employee pool will be roughly worthless.

------
KKKKkkkk1
What are the chances that there is no rational thinking behind this deal? What
I mean is, what if some Amazon exec said, "Hey, sounds like a cool project,
let's throw a couple $b their way and write it off as R&D in the worst case?"
Or maybe that exec is buddies with a VC who lost a ton of money on Zoox, and
the exec decided to bail out the VC at the expense of Amazon shareholders? Or
maybe someone at Amazon really likes Jesse Levinson?

~~~
threeseed
Zero chance. Less than zero chance.

Companies don't make billion dollar purchases with no due diligence with just
one person involved in making the decision. And they don't buy companies just
to immediately write them down.

Amazon is one of the most successful companies in the world. They didn't get
there by acting like children.

~~~
KKKKkkkk1
Collective decision making and financial due diligence can't always stop you
from making dumb decisions. Especially at the most successful companies in the
world.

~~~
niyazpk
Is there a chance that this will turn out to be a bad decision?

Sure.

Is there a chance that Amazon did not analyze it to death before making the
decision?

Nope.

