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Google Is Back in the Robotics Business—What Gives?

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Google appeared to dismantle its robotics program

Around 2013, Alphabet’s (GOOGL) Google launched an ambitious robotics program, leading to its acquisitions of several robotics startups in the United States and Japan. A few years down the line, though, the program appeared to crumble, with the company either selling or shutting down several of its robotics operations.

In 2017, for instance, Google sold its robotics business, Boston Dynamics, to SoftBank (SFTBF), the parent company of American mobile operator Sprint (S) and a large investor in ride-hailing company Uber. Boston Dynamics builds robots that move like humans.

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Google reboots its robotics program

According to a report from the New York Times, Google has resurrected its robotics ambitions and is quietly developing AI-driven robots that can be used in manufacturing, warehouse automation, and transportation. Keen to bring more efficiency into their operations, leading e-commerce companies such as Amazon (AMZN) and JD.com (JD) have started deploying rolling robots to help with last-mile deliveries. The type of robots that Google is building could appeal to e-commerce companies seeking to improve their warehouse efficiency and speed up deliveries.

Revenue opportunity in the robotics market

For Google, the robotics market presents an attractive growth opportunity, especially now that it’s keen to diversify its revenue sources. In the industrial segment alone, Grand View Research estimates that the global industrial robotics market is growing at a rate of 7.0% annually and will exceed $41.2 billion by 2020. The industrial robotics market was valued at $31.5 billion in 2016.

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