Amazon’s experiment with delivery robots might have a science-fiction feel, but the potential cost savings for the e-commerce giant would be anything but fantasy. Morgan Stanley estimated the e-commerce and cloud giant is now investing to automate roughly $200 billion in logistics costs — a sum equal to 35% of its online retail revenue — which includes using AI-powered humanoid robots to make deliveries. The new robots, according to a report in The Information , would go directly to customers’ doors from Rivian electric vans, reducing delivery times and labor costs for the billions of packages Amazon ships annually. The company is reportedly testing these AI-powered humanoid robots at a San Francisco “humanoid park” obstacle course. Amazon’s reported work on software to use human-like robots in package delivery represents the next chapter in the company’s lucrative automation strategy, the analysts said in a note to clients late Thursday. The firm views humanoid delivery robots as a key driver of “more durable market share gains” in Amazon’s logistics network, which already holds a 30% share of the U.S. parcel delivery market, surpassing UPS and FedEx . Morgan Stanley projects that 10% of U.S. units that go through robotics-enabled warehouses can lead to $2 billion to $3 billion in annual savings by 2030. While acknowledging the potential for the deployment of humanoids is further out, the analysts highlighted Amazon as “one of the companies best positioned to deliver material financial return from physical AI robots within the next 3-5 years.” They also see Amazon’s retail business as the “most underappreciated” beneficiary of generative AI in the tech industry, with the potential to deliver “more items to more people faster … and in a more cash flow generative manner” over the next five to 10 years. Shares of the e-commerce giant were up as much as 2% Friday at roughly $212 per share. The stock is down 3.7% year to date. AMZN 1Y mountain Amazon 1-year return Amazon’s track record supports this optimism. In 2024, the company lowered its global “cost to serve” per unit for the second consecutive year, building on its success in 2023 when it cut costs by over 45 cents per unit. This continued efficiency drove a 61% year-over-year increase in worldwide operating income, reaching a record $21.2 billion last year. The company was able to achieve this by regionalizing its fulfillment network, which shortened delivery distances and enabled it to deliver over 9 billion items to Prime members globally in 2024 with same-day or next day delivery, a company record. Amazon has also been getting help from robots to stow items in warehouses, a task previously done by humans, and leverages machine learning to optimize inventory placement and demand forecasting. As Amazon continues to innovate, investors like us also see a clear path to enhanced profitability and market dominance in logistics given its unmatched scale and disciplined focus on…
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