Zoox is Kiva For Roads

Amazon went bargain basement shopping for Zoox at $1B.

Amazon acquired Zoox for $1B to further its supply chain and autonomous vehicle investment. This is a bargain price.

Like the warehouse industry, labor is tight. It's difficult to recruit, and the companies with more automation have an advantage.

First, Amazon takes big swings. I think the "base case" for Amazon is the Kiva acquisition. This is Kiva for roads.

The "swing for the fences" part of this acquisition is software, platforms, and mobility services for any kind of autonomous vehicle - cars, planes, boats, trains, etc.

Their timing couldn't be better. With Uber and Lyft still struggling with profitability, they see weakened market players. This also plays into it.

Also Zoox has raised $900M+. Amazon acquired it for $1.2B. That is value. And this is not a home run for Zoox founders.

Jason Cox noted “It was interesting news as I saw Amazon was criticized for the price. I don't think the general public understands that $1b for a promising start-up is fairly normal anymore. Maybe even, as you say, a bargain depending on how far along their work is.” It's certainly not a premium on the valuation from an investor point of view.

James Millett chimed in to say he was reminded of when Facebook bought WhatsApp and Instagram. Could end up being a similarly big step.

This is part of Amazon's DNA. Take a big swing. Maybe it doesn't work out, but without those swings the company slowly dies.