Amazon bets on AI, autonomous vehicles and Asia with a $1 billion industrial innovation fund!

Amazon invests in logistics and supply chain startups

Amazon has spent nearly two years investing an undisclosed portion of its $1 billion industry innovation fund in a dozen U.S. and Israeli startups focused on logistics, supply chain and customer satisfaction. Now, Amazon is expanding a bit, aiming to expand geographically and get into areas such as generative AI, supporting the fund's broader mission, said the fund's new head, Franziska Bossart, in an exclusive interview with us.

Amazon's Industrial Innovation Fund continues to support startups

Amazon's Industrial Innovation Fund, launched in April 2022, is still looking for startups to invest in that can help the e-commerce giant deliver goods faster, while improving the experience of customers as well as employees working in its warehouses and logistics departments. The fund also aims to capitalize on Amazon's previous investments in AI and robotics, which have led to improvements in its operations, including the addition of robotic arms performing repetitive tasks and automated vehicles that can help transport larger objects. Its first tranche of investments in 2022 has been awarded to five startups developing safety-enhancing robotic and wearable technologies in its fulfillment centers.

An acceleration in investments since spring 2023

The fund got off to a slow start, with just $110 million invested in startups in its first year. The pace seems to have picked up since spring 2023 with investments in Veo Robotics, computer vision company Flymingo, industrial wireless automation startup CoreTigo, Rightbot and Instock. The fund even recently invested in an undisclosed generative AI startup, said Bossart, who only indicated that the company's technology could have a strong impact on robotics.

Geographic and thematic expansion

From now on, both the geographical and thematic scope of action will be broader. Bossart told us that it sees potential in Europe and Asia, and would like to see the portfolio, mainly made up of early-stage startups, move "a little" more towards investments in later-stage startups. The company also published a blog last Wednesday describing the fund's evolution.

Amazon's interest in AI and robotics

Amazon's interest in and use of AI is not new. However, Bossart sees potential in the application of generative AI to robotics and automation. Machine learning, a form of AI in which computer systems learn from data, is already being used in robotics. Bossart is looking for startups that use generative AI, which uses trained models to create new information and data, which can be applied to perception, manipulation and control to improve automation. In other words, using generative AI to help merge all the components of robotics and automation to make them more efficient.

Access to Amazon's vast data sets

And she points out that this is also an opportunity for startups. "The biggest challenge for these startups is accessing vast data sets," used to train AI, she said. "Amazon has one of the largest data sets available".

Amazon's interest in robotics

Robotics has long been an area of interest for Amazon, a company that relies heavily on automation and robotics to achieve its delivery goals. Companies developing humanoid robots are of particular interest, Bossart said, citing the fund's investment in Agility Robotics, a Corvallis, Oregon-based startup known for its bipedal robot named Digit.

Solutions for faster delivery

Bossart also sees potential in last-mile delivery solutions to get parcels to customers faster. And that doesn't just mean investing in startups developing autonomous vehicle technologies, although Bossart has indicated that this is on the list. Bossart is also looking for startups working on technologies for all links in the supply chain. For example, small-scale automation tools that enable packages to be unloaded faster, she noted.

An experimental fund

And while the company is always keen to find startups whose technology can be used in the Amazon ecosystem, Bossart stressed that the fund's investments are not tied to commercialization. "We are first and foremost experimental," said Bossart.

Amazon's other investment tools

Amazon's Industrial Innovation Fund is not the company's only investment tool. Amazon has a long history of finding and supporting companies developing new technologies, products and services essential to its own mission. Sometimes, Amazon even acquires the entire company.

In 2020, Amazon launched a $2 billion Climate Fund to invest in sustainable technologies and services that will help the company achieve its commitment to net carbon neutrality by 2040. Amazon's Climate Fund has already invested in more than a dozen companies, including CarbonCure, CMC Machinery, Pachama, Redwood Materials, Resilient Power, Rivian, TurnTide Technologies, BETA Technologies, Ion Energy, ZeroAvia and Infinium.