Amazon is to acquire self-driving start-up Zoox for more than $1.2bn (£974m, €1bn), making it the group’s biggest investment into the autonomous vehicle sector.
Rumours are that Amazon intends to work with Zoox to create self-driving taxis, placing it in direct competition with Alphabet’s Waymo.
Amazon has also bought smaller stakes in electric truck maker Rivian and the self-driving start-up Aurora. Zoox will operate as a standalone business, Amazon said, and its leadership will remain unchanged.
The purchase price, which has not been officially disclosed, is a steep discount compared to the $3.2bn valuation that Zoox had in July 2018.
Zoox had been planning to launch a pilot programme this year, but the company was hit by the coronavirus pandemic and had been looking for a sale since May.
It made about 100 employees redundant in April, while rival Cruise, a division of General Motors, cut 150 staff. There were doubts that Zoox would be able to build its self-driving taxi programme without further investment.
The sector faced challenges even before the pandemic. Only Waymo has launched a seamless driverless service. But since it was unveiled in Arizona in late 2018, the company has not expanded elsewhere.
This deal would be Amazon’s second-biggest acquisition overtaking the purchase of online shoe retailer Zappos for $1.2bn in 2009. Amazon’s biggest deal was the 2017 acquisition of Whole Foods, the upmarket grocer, for reportedly $13.7bn.