Amazon is advancing its use of artificial intelligence and robotics to streamline logistics, automate warehouses, and lower operational costs. The company has introduced new AI-driven software updates aimed at improving delivery speed and efficiency.

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Amazon is expanding its use of artificial intelligence and robotics to optimize its logistics operations and reduce costs. Recent updates include new AI models designed to speed up delivery and automate warehouse processes, primarily through software improvements to its robotic fleet. These efforts are expected to improve operating margins, with analysts suggesting a potential increase from 11% to 15% if the initiatives are successful. The majority of Amazon's robotics advancements currently involve robotic arms and autonomous machines within warehouses, rather than humanoid robots. These developments aim to enhance delivery speed, maintain customer engagement, and support the company's core business functions.

Amazon integrates AI to reduce logistics costs

Amazon's robotic strategy isn't focused this week as they announce new AI and robotic fleet updates designed to help the company lower costs. Kate Rooney has more on these savings. Wait, Kate, are these robot factory workers? I thought they were going to be, you know, like the ones that Tesla's working on that are going to do my dishes or whatever. Oh, the humanoids. And we'll talk about that, Kelly. I think that's what we're all focused on. But these were more of software updates this week. But if you think about sort of the start of this big tech AI race, it's only been a couple of years, but Amazon CEO Andy Jassy has made the case repeatedly that this technology is going to help the business internally. He said at certain points, you know, they're not just competing because it's the newest buzzword and then it's cool, as he's described it. We are seeing more proof of that. At this point, AI is emerging as a way for Amazon to keep costs down within the e-commerce business, in part by using robots. Some folks call this physical AI, especially in Silicon Valley. They're really trying to streamline the supply chain as well. Amazon right now needs this more than ever with the threat of tariffs, shares negative on the year and really have been kind of in the middle of the mag seven pack this week. Amazon did roll out some incremental AI updates. One model is meant to speed up delivery. Another is to upgrade its fleet of robots on the software side, which in turn would help automate warehouses and keep costs down. The key for investors here is margins. So right now, Amazon's business, it's roughly 11% operating margins. Gene Munster over at Deepwater thinks that could go to 15% if all of these AI efforts pay off. He compared it to Tesla's strategy and thinks the bulk of the value right now for Amazon and AI, it's in fulfillment center robots. Morgan Stanley also weighing in today, calling Amazon an underappreciated gen AI winner, citing recent investments in automating $200 billion in logistics costs. Yeah. And I don't mean to be glib because if they can use robotics or AI to actually speed up the delivery process, that is a huge deal for the company. Definitely. It's so interesting you brought up humanoids too. I mean, those are kind of the exciting part, but I would say 99% of this at this point in terms of robotics are these robotic arms. You've got these things that kind of look like these Roombas that go around the factory space, but they can lower costs overall and also make delivery faster. There's a flywheel effect with prime memberships. People are demanding things at their doorstep much faster. That's going to help them maintain that speed up delivery, keep prime members engaged. And it's kind of fits in the big picture. It reminds me of, I mean, both Amazon and Meta are basically using the technology to do what they already do better as opposed to pivoting into kind of brand new businesses, at least for now. And Google. Yeah. Yeah. Kate, thanks very much. Kate Rooney.

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Amazon integrates AI to reduce logistics costs

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