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Why Amazon Is Investing in an Autonomous Vehicle Tech Startup

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Amazon has invested $530 million in Aurora

E-commerce behemoth Amazon (AMZN), which has disrupted several industries over the years, is now looking to enter the ultra-competitive autonomous vehicle market. Amazon, along with Sequoia Capital and T. Rowe Price Associates, has invested $530 million in Aurora, an autonomous vehicle technology startup. Founded in 2017, Aurora develops software and hardware to help autonomous cars navigate. The startup has moved quickly to pen deals with auto giants such as Hyundai and Volkswagen, which plan to use Aurora’s technology in their autonomous vehicle push.

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Why Amazon wants to enter the crowded autonomous vehicle space

Aurora, founded by autonomous vehicle veterans from Alphabet (GOOG), Tesla (TSLA), and Uber, has 200 employees and ten test vehicles on US roads. The purpose of Amazon’s push into autonomous vehicles is not known yet, though it may be to smoothen its last-mile logistics.

The e-commerce giant, which has been trying to reduce its reliance on delivery companies such as FedEx and UPS, saw it shipping costs surge 23% year-over-year to $9.04 billion during the fourth quarter. Amazon has been steadily expanding its logistics operations, even adding a fleet of leased aircraft from Air Transport Services Group.

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