Amazon's latest big bet may flop

The company is working on reducing its logistics costs by trying to make science fiction a reality.

Jun 9, 2025 - 00:12

Science does not understand consciousness; this is an unsolved problem. Consciousness is possible with little to no intelligence, but there is no such thing as intelligence without consciousness. If you don't understand something, can you recreate it? I don't think it is likely to happen.

How many neurons does an ant have? According to the University of Arizona News, a desert-harvesting ant species has about 90,000 or so brain cells.

How did this question make you feel? Did it make you angry, surprised, or curious? Normally, if we are not under pressure, and there will be no negative outcome, if we are asked something we can't answer, there is no negative emotional reaction to it.

If you are told something incorrect and genuinely understand the truth, you will not react angrily. Let's say someone tells you that the sky is brown. You might get worried about that person's health or question their intentions, but you shouldn't get angry.

If a person's belief is questioned, we can expect an adverse reaction, especially if the belief is important and the argument against it is convincing. Sometimes we mix up what we know and think we know, but it is still a belief we have.

When I first heard of Amazon's (AMZN) "Just Walk Out" system, I immediately saw the scene from a Silicon Valley TV show in which Jared hired a "click farm" in India to generate fake user activity for his company's website. I was convinced this Amazon system was a huge number of Indians doing the work and not an "AI." It turned out I was right.

Amazon CEO explains how he plans to handle the tariff war pressure.
Image source: JD Lasica via Wikimedia Commons

Amazon under tariff pressure

A lot of companies have been put into a tough spot by the tariff war.

Amazon is no exception, and CEO Andy Jassy tried to explain how he plans to handle the situation during the company's first-quarter earnings call.

"It's hard to tell what's going to happen with tariffs right now. It's hard to tell where they're going to settle and when they're going to settle. And so, a lot of what we're thinking about short and medium term actually turns out to be what we think about long-term too, which is, how do we actually have the broadest possible selection for customers at the lowest possible prices?" stated Jassy.

It seems that the real answer is to create savings in Amazon's logistics.

The company recently introduced a Vulcan robot, which, from what I've seen, is an advanced packing machine.

Amazon calls it a robot because it sounds so much cooler. It is a good machine, and it probably saves the company a lot of money. After all, it can work for 20 hours straight without stopping. But it is not a robot replacing humans. It is a machine that helps them waste less time.

Recently, an AI tech startup, Builder AI, backed by Microsoft, went bankrupt. They were building an AI platform that would make creating applications as "easy as ordering pizza". Even if you are not familiar with the story, you should be able to figure out where I am going with this. Real people were writing the code, not AI.

This is what happens when companies start believing their marketing, and even the big ones are not immune to it.

More Retail:

Amazon seems to be set in the direction of repeating the mistake of "Just Walk Out" deception. This time, it’s betting it will make huge savings on logistics.

Amazon plans to unleash humanoid robots onto streets

Unconfirmed media reports suggest that Amazon is developing software for humanoid robots that could eventually be used in its delivery operations.

According to the reports, Amazon is creating a “humanoid park” closed-course environment to test the humanoid robots before testing them on real streets.

Based on this information, Morgan Stanley analyst Brian Nowak gave us his opinion.

The analyst previously estimated that Amazon is working on automating its fulfillment costs (approximately 18.6% of retail revenue) and that every 10% of US units that go through new robotics-enabled warehouses can drive between $2 billion and $3 billion of annual savings in 2030.

"New headlines support our previous views that Amazon is also taking steps to automate its shipping and last-mile logistics (which also make up 17.5% of retail revenue). The potential timing of these humanoids may admittedly be further out, but when we combine this with autonomous long-haul and last mile trucking, and drones, we see a path over the next 5-10 years where Amazon is set to be able to deliver more items to more people faster and in a more cash flow generative manner," said Nowak and his team.

"This should enable AMZN to invest in price and technology to drive further share gains, while also delivering more free cash flow for shareholders."

Morgan Stanley analysts maintained Amazon's overweight rating, with a price target of $250.

I expect that if the "robots" launch, humans will remotely control them. Whether or not this leads to actual savings is another thing.