Amazon.com Inc. has announced the hiring of the founders of Covariant, a robot-software maker, in a strategic move known as an “acquihire” aimed at enhancing its warehouse automation capabilities.
TakeAway Points:
- Amazon maintains its leadership in the industry by acquiring the founders and employees of Covariant to increase warehouse automation.
- This action fits in with the Big Tech practice of hiring AI experts without fully purchasing the company—a tendency previously observed with Microsoft and Google.
- Amazon aims to gain a larger portion of the online retail market by permitting purchases through TikTok and Instagram, thereby expanding social commerce.
In a calculated manoeuvre known as an “acquihire,” Amazon.com Inc. has declared that it has hired the founders of Covariant, a manufacturer of robot software, with the goal of strengthening its warehouse automation capabilities.
According to a blog post by Amazon on Friday, the e-commerce giant will integrate executives and about a quarter of Covariant’s staff into its operations. While Amazon did not disclose the specifics of the takeover, sources familiar with the matter indicated that Amazon was purchasing the company. Covariant did not respond to requests for comment.
Amazon has been a leader in warehouse automation since its acquisition of Kiva Systems in 2012, which provided robots that navigate large warehouses to fetch products and expedite order fulfillment. Covariant’s software is utilized by several notable clients, including online retailer Otto Group, logistics firm Radial, and pharmaceutical distributor McKesson Corp. Through the agreement, Amazon will also receive a non-exclusive license to Covariant’s robotic foundation models.
Recruitment strategy of big tech
The move by Amazon is part of a broader trend among major tech companies like Microsoft and Google, who have been employing creative strategies to acquire talent from top artificial intelligence startups without outright purchasing the companies. Earlier this month, Google signed a deal with Character.ai to hire its founder and a significant portion of its workforce while licensing its technology. Similarly, Microsoft executed a comparable strategy with Inflection, and Amazon followed suit with Adept.
These strategies allow tech giants to sidestep regulatory scrutiny and antitrust concerns while acquiring valuable talent and technology. This approach also provides an exit for AI startups that may be struggling financially. However, this method of talent acquisition could potentially attract regulatory attention in the future.
Using Social Media with Amazon
In a separate development, Amazon has been expanding its reach by allowing purchases through social media platforms like TikTok and Instagram. This strategy aims to tap into the growing trend of social commerce, where 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.
This action is in line with Amazon’s overarching plan to improve its e-commerce capabilities and expand its customer base. It is anticipated that the social media platform integration will boost sales and increase traffic to Amazon’s marketplace.
Meanwhile, on Friday, Amazon’s checkout function experienced technical difficulties, preventing customers from completing their purchases. Users attempting to proceed to checkout encountered error pages featuring photos of dogs, a common error message on Amazon’s platform. The issue was reported on both Amazon’s e-commerce website and its mobile app. According to Downdetector, a site that tracks online service complaints, there was a noticeable spike in issues with Amazon.com starting around 4 p.m. New York time.
