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Amazon Acquires Covariant Founders to Boost Warehouse Automation

Posted on by darion

Amazon.com Inc. announced the hiring of the founders of robotics software maker Covariant in a strategic move known as an “acquisition” aimed at expanding its warehouse automation capabilities.

Conclusions:

  • Amazon maintains industry leadership by acquiring Covariant founders and employees to expand warehouse automation.
  • The move is consistent with the practice of large tech companies hiring AI experts without having to outright take over the entire company — a trend previously seen at Microsoft and Google.
  • Amazon aims to gain a larger share of the online retail market by enabling shopping via TikTok and Instagram, thereby expanding social commerce.

Amazon acquires Covariant

In a deliberate maneuver known as an “acquihire,” Amazon.com Inc. said it has hired the founders of Covariant, a maker of robotic software, to bolster its warehouse automation capabilities.

According to an Amazon blog post from Friday, the e-commerce giant will integrate executives and about a quarter of Covariant’s staff to its operations. While Amazon did not disclose details of the acquisition, sources familiar with the matter indicated that Amazon was buying the company. Covariant did not respond to requests for comment.

Amazon has been a leader in warehouse automation since acquiring Kiva Systems in 2012, which provided robots that navigate large warehouses to pick products and speed order fulfillment. Covariant’s software is used by several high-profile customers, including online retailer Otto Group, logistics company Radial and pharmaceutical distributor McKesson Corp. Under the deal, Amazon will also receive a nonexclusive license to Covariant’s robotic foundation models.

Recruitment strategy of large technology companies

Amazon’s move is part of a broader trend among big tech companies like Microsoft and Google that are pursuing creative strategies to acquire talent from top AI startups without buying those companies outright. Earlier this month, Google inked a deal with Character.ai to hire its founder and a significant portion of its workforce while also licensing its technology. Microsoft similarly pursued a comparable strategy with Inflection, and Amazon followed suit with Adept.

These strategies allow tech giants to bypass regulatory scrutiny and antitrust concerns while acquiring valuable talent and technology. This approach also provides an outlet for AI startups that may be struggling financially. However, this method of talent acquisition could potentially attract regulatory scrutiny in the future.

Using Social Media with Amazon

In a separate development, Amazon is expanding its reach by enabling shopping through social media platforms like TikTok and Instagram. This strategy aims to capitalize on the growing trend of social commerce, in which consumers make purchases directly through social media apps. By integrating with platforms like Meta and TikTok, Amazon is positioning itself to capture a larger share of the online retail market.

The move is in line with Amazon’s overall plan to improve its e-commerce capabilities and expand its customer base. The integration of the social media platform is expected to boost sales and traffic to Amazon’s marketplace.

Meanwhile, Amazon’s checkout experience encountered technical difficulties on Friday, preventing customers from completing their purchases. Users attempting to checkout encountered error pages featuring images of dogs, a common issue mistake message on the Amazon platform. The problem was reported on both Amazon’s e-commerce website and its mobile app. According to Downdetector, a site that tracks complaints about online services, a noticeable increase in problems with Amazon.com occurred around 4 p.m. New York time.