How Amazon is using generative AI to drive more same-day deliveries

By Finance News On Sep 21, 2024

For years, Amazon has set the bar for package delivery. When Prime launched in 2005, two-day shipping was unheard of. By 2019, one-day shipping was standard for millions of items. Now, the retail giant is turning to generative AI to drive more same-day shipping.

Amazon is using the technology to optimize delivery routes, make more intelligent warehouse robots, create more-ergonomic environments for employees and better predict where to stock new items, said Steve Armato, Amazon’s vice president of transportation technology and services.

During an exclusive tour of Amazon’s largest California sort center, located in Tracy, Armato told CNBC that 60% of Prime orders in March were delivered the same day or next day in the top 60 metropolitan areas in the U.S. Amazon is betting on generative AI to increase that figure.

“It seems subtle, but at this scale, getting just one more product in the right spot means that it’s shipping less distance when you order it,” Armato said in an interview at the warehouse.

In 2020, Amazon began developing models for demand forecasting and supply chain optimization using transformer architecture, the backbones of what we know today as generative AI.

“Generative AI is the next big evolution in technology,” Armato said. “It’s remarkable, and we’re already applying it in very practical ways across our operations.”

But not all the changes that generative AI may bring to the e-commerce giant are positive. There are concerns about the high-energy needs of generative AI and about its ability to enable robots to replace Amazon’s human workforce, analysts told CNBC.

Robots and new roles

The number of Amazon warehouse robots grew from 350,000 in 2021 to more than 750,000 in 2023, according to the company.

Amazon began adding AI transformer models to its warehouse delivery robots in 2022 so the machines can dash around each other more intelligently. CNBC watched hundreds of them move in a coordinated grid in the warehouse. Armato calls this “the dance floor.”

“Some of the two-day deliveries might stand aside, let the robot with a next-day delivery go on its mission first and take a straight line to its destination,” Armato said.

Hundreds of robots dash around each other with the help of generative AI at Amazon’s largest California sort center in Tracy, California, July 31, 2024.

Lisa Setyon

While these robots navigate using a series of QR codes, Amazon’s next generation of drive units, called Proteus, are fully autonomous, the company said.

“They’re using generative AI and computer vision to avoid obstacles and find the right place to stop,” Armato said.

As part of the company’s AI strategy, Amazon in August struck a deal with AI startup Covariant. Amazon hired the startup’s founders and licensed its models that help robots handle a wider range of physical objects. Amazon is also developing a bipedal robot called Digit that can grasp and handle items in a humanoid way.

CNBC saw a row of 20 robotic “Robin” arms that use…