Amazon is strategically leveraging robotics to generate cost savings while simultaneously increasing its investments in artificial intelligence (AI).
According to a recent report in the Financial Times (FT), the e-commerce giant plans to spend $35 billion on its retail network, which includes robotics-powered warehouses. This investment is designed to enhance operational efficiency and delivery times, especially given the growing competitive landscape, where companies like Temu are gaining traction. While the majority of Amazon’s $100 billion total spending for the year will support AI initiatives, approximately a quarter will be dedicated to automation within its e-commerce division, based on analyst estimations.
“We’re seeing today how fruitful this technology is in transforming our everyday,” Tye Brady, chief technologist at Amazon Robotics, told the FT, adding that the company plans to “continue to invest” in automation.
The report highlights the cost-saving potential of automation by referencing Amazon’s fulfillment center in Shreveport, Louisiana. This facility, which is six months old, covers 3 million square feet and uses robots throughout the fulfillment process. The widespread adoption of robotics has enabled the company to reduce costs by 25%, following a tenfold increase in robotics compared to the previous generation of warehouses.
As reported by PYMNTS earlier this month, Amazon is slated to spend $26 billion this quarter on developing AI capabilities for Amazon Web Services (AWS). This level of investment is expected to remain consistent throughout the year. This level of expenditure aligns with the broader trends among Amazon’s Big Tech competitors, who are collectively projected to invest $320 billion in 2025, driving what Microsoft President Brad Smith described in a recent blog post as a new industrial revolution.
“However, AI requires hefty investments,” PYMNTS recently noted. “Training large language models uses thousands of GPUs (each Nvidia GPU costs about $10,000 or more) or specialized AI chips for a total of tens or hundreds of millions of dollars. Running these AI models at scale also requires high-performance data centers, which need more servers and require more cooling and maintenance.”
In other robotics/AI news, PYMNTS explored the potential of household robots, following the introduction of new robots by AI startup Figure. Jenny Shern, general manager at robot builder NexCOBOT, noted that humanoid robots face greater challenges than their industrial counterparts.
“Traditional industrial robotic arms with vision systems primarily rely on preprogrammed instructions to execute tasks. This works well in factory environments where applications are repetitive and goal-oriented,” she said. She added that “implementing humanoid robots into household settings is a more complex advancement because, unlike factories, household environments are highly dynamic, and tasks will vary significantly from one home to another,” Shern added.
