Jeff’s Note: There’s never been a more exciting time to be a crypto investor.
This is the first actively pro-crypto administration. Under its guidance, we’re going to see an outpouring of support that will foster an incredible surge of innovation in blockchain technology.
This new regulatory landscape not only supports but is actively working towards establishing crypto in our financial system… and it’s about to set off a Golden Age of Crypto.
And what better way to make the most of this than by leveraging the power of artificial intelligence?
I’ve developed a strategy that fuses these two incredible technologies to take advantage of swings in the crypto markets. I’ll get into all the details next Wednesday, March 12, at 8 p.m. ET.
If you’d like to join me, you can go here to automatically sign up to attend.
When most of us think about Amazon (AMZN) and artificial intelligence (AI), we think about massive AI data centers that are part of its Amazon Web Services (AWS) division.
It’s an incredible business that will generate about $127 billion in revenue this year. It has grown to almost half the size of its Amazon online e-commerce business and has, historically, been responsible for the majority of the company’s free cash flow.
Last month, to the surprise of analysts, Amazon announced that it would be spending about $100 billion on capital expenditures (CapEx) related to AI in 2025 – much higher than expected.
It was yet another critical data point that shows companies aren’t pulling back from AI, they’re pushing even harder.
Most assumed it was all going towards building new AI data centers, but about 25% of the $100 billion CapEx will be used for AI in operating its own business.
Investing $25 billion just for internal operations might sound like an extraordinary sum, but when we understand the context and the details, it makes perfect sense.
One of Amazon’s biggest problems as a company is labor shortages and turnover. The work in logistics, distribution facilities, and fulfillment centers can be monotonous and hard on the body.
This problem was the catalyst for Amazon’s $775 million acquisition of Kiva Systems in 2012 which became the foundation for its own internal robotics division. Thirteen years have passed since that deal, and Amazon has now deployed an incredible 750,000 robots around the world in Amazon facilities.
It won’t be long before Amazon “employs” more than 1 million mechanical “workers.”
Amazon now has eight different kinds of AI and computer vision-enabled robots that perform various tasks required to fulfill its customers’ online orders.
One of the most widely used categories – which evolved directly from the Kiva Systems technology – has been what Amazon calls “drive units” like the one shown below. These drive units locate, pick up, and deliver “pods” from one location to another in a logistics facility.
Drive Unit | Source: Amazon
Amazon also has a few different kinds of picking and sorting robots like the one shown below.
Sparrow | Source: Amazon
These are designed to both pick and sort items for packaging as well as lift boxes and packages from one conveyor belt or pallet to another location or bin.
But the last year has been a turning point for Amazon and its use of robotics and AI.
We got a glimpse of the future last October when it announced Proteus – Amazon’s first fully autonomous robot.
Proteus | Source: Amazon
These are large, heavy, and robust robots capable of picking up 880 pounds. But what really sets them apart from Amazon’s older robotic technology is that they do not need to follow lines or stickers on the floor.
Proteus has cameras and sensors that allow them to safely interact with human coworkers and navigate logistics centers autonomously to get their work done.
And about every two hours, Proteus takes a charging break to fuel up its batteries and get back to work.
Proteus Charging Station | Source: Amazon
New jobs have been created. For example, a mechatronics technician is required to maintain, clean, and repair the robots. These jobs are widely available at Amazon in multiple locations. And remember, there are already 750,000 individual robots in use at Amazon.
These intelligent and autonomous robots are just a sign of things to come and are symbolic of the changes coming in the workforce.
The shift in Amazon’s robotics technology is tied to two very clever deals that Amazon constructed last year.
The first notable deal was Amazon’s acquisition of the CEO and founder of Adept AI and a few key employees, which I wrote about last July in The Bleeding Edge – Amazon’s AI Strategy Unfolds.
Adept AI was interesting because it was working on agentic AI technology. Its CEO, David Luan, was put in charge of Amazon’s AGI Autonomy division. Perhaps not surprisingly, Adept was founded by a few OpenAI and Google engineers.
What made the deal unique is that Amazon got the key talent that it wanted from Adept and then struck a non-exclusive licensing deal with Adept AI for the use of its software. Adept was then subsequently acquired by another company – ALS Dental Laboratories.
And then in August 2024, Amazon turned around and did the same thing again. This time it hired the three founders of Covariant, a promising robotics/AI company working on foundational AI models for robotics.
And again, it did the same thing. I covered this in more detail in The Bleeding Edge – Another Stealth “AI Acquisition”, but the gist is that Amazon signed a non-exclusive licensing deal for the use of Covariant’s AI.
In both deals, Amazon gained access to key talent, agentic AI, and foundational models for robotics, without acquiring the companies outright.
These unique deal structures were designed for one simple reason: to avoid anti-trust scrutiny.
It’s one thing for Amazon to invest in promising technology companies, closely monitor their progress, and become a customer for their technologies.
It’s a whole different story if they buy out promising tech companies and take them off the board thus reducing competition in the industry.
Amazon’s acquisition of Kiva Systems didn’t get much attention back in 2012, but it should have. Amazon quickly moved to terminate Kiva’s agreements with other companies so that it eliminates any access to Kiva’s technology by competitors.
Today, I doubt Amazon could get away with that given its dominance in the industry.
It’s a $2 trillion company. Regulators would see it clearly has the capital to either build the technology itself or pay someone else to do it.
But it found a loophole by acquihiring key employees and then licensing the technology to make it appear that it wasn’t an acquisition. It’s a clever strategy because it can satisfy the venture capital stakeholders of the private company and keep itself out of hot water with governments.
Amazon remains one step ahead. And with $25 billion of investment coming in intelligent robotics this year alone it will see major productivity improvements.
The reality is that companies will need to employ intelligent robotics to remain competitive. The cat’s out of the bag. It has already happened. And just because Amazon is keeping its latest developments all to itself, doesn’t mean it isn’t here.
Jeff
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
The Bleeding Edge is the only free newsletter that delivers daily insights and information from the high-tech world as well as topics and trends relevant to investments.
