Amazon Banking on Robotics Savings Amid Increased AI Spending | PYMNTS.com

Amazon is aiming to derive savings from its robotics investment as it ups AI spending.

As the Financial Times (FT) reported Wednesday (Feb. 26), the tech giant is expected to spend $35 billion on its retail network — which includes robotics-powered warehouses — to drive efficiencies and improve delivery speeds amid rising competition from the likes of Temu.

Although most of the $100 billion the company will spend this year will go to artificial intelligence (AI) initiatives, roughly a quarter will be earmarked for automation in Amazon’s eCommerce business, the report added, citing analyst estimates.

“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 notes that Amazon’s Shreveport, LA fulfillment center has already shown the types of savings automation can bring.

At this six-month-old, 3 million square foot facility, robots are involved at every stage of fulfillment, helping the company cut costs by 25% after a tenfold increase in robotics compared with its last generation of warehouses.

As PYMNTS wrote earlier this month, Amazon plans to spend $26 billion this quarter developing AI capabilities for Amazon Web Services (AWS), a level of spending expected to remain consistent throughout this year.

That type of spending is in line with Amazon’s Big Tech counterparts, which are collectively set to spend $320 billion in 2025 as they embark on — as Microsoft President Brad Smith put it in a recent blog post — a new industrial revolution.

“However, AI requires hefty investments,” PYMNTS wrote recently. “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 this week examined the potential of household robots following the debut of new robots from AI startup Figure.

Jenny Shern, general manager at robot builder NexCOBOT, told PYMNTS humanoid robots face more complex challenges than their industrial cousins.

“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

However, “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.