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Amazon Reportedly Considering Acquisition of Driverless Startup TuSimple

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【Summary】The two companies are reportedly negotiating a potential acquisition deal; and if confirmed, would be a huge win for both sides. To date, Amazon has been actively seeking new methods to improve deliveries and reduce dependence on third-party shipping companies.

Michael Cheng    May 09, 2019 6:47 PM PT
Amazon Reportedly Considering Acquisition of Driverless Startup TuSimple

According to a report from TMTPost, Amazon could be looking to acquire self-driving startup TuSimple. The two companies are reportedly negotiating a potential acquisition deal; and if confirmed, would be a huge win for both sides.

Chen Mo, CEO of TuSimple, quickly denied the possibility of selling the business to Amazon. Mo mentioned the startup is in the process of launching a new financing round, with negotiations open to investors. A valuation exceeding $1 billion, based on its latest funding round (Series D), has enabled the company to reach unicorn status earlier this year. TuSimple's high-profile investors include: NVIDIA, Composite Capital Management and Sina.

Acquisition Rumors

The potential addition of TuSimple to Amazon's growing umbrella of subsidiaries, which includes Whole Foods, Twitch and Zappos, would allow the business to cement its presence in the self-driving industry.

To date, Amazon has been actively seeking new methods to improve deliveries and reduce dependence on third-party shipping companies. Examples of such methods include drones, aerial distribution centers via giant blimps and friendly bots for last-mile deliveries in urban locations (Amazon Scout). In this complex aspect of Amazon's operations, TuSimple's autonomous trucks would be extremely beneficial for the business.

"Part of what they're doing is the digital transformation of the entire supply chain," explained Michael Zakkour, Vice President of Global Digital Commerce and New Retail at Tompkins International.

"All of Amazon's technology is focused on digital transformation of every part of the product's journey."

Unlike its competitors in the space, TuSimple is already servicing customers via its autonomous trucks. The startup also revealed plans to expand its fleet to 50 driverless trucks in the coming months. When it comes to autonomous driving performance, TuSimple's Class 8 semi-trucks feature SAE L4 self-driving capabilities. Its fleet utilizes eight external cameras and a variety of sensors.

Powering TuSimple's Autonomous Fleet

In the past few years, several activities have unfolded that are currently fueling rumors surrounding the potential acquisition. TuSimple is leveraging Amazon's cloud services (Amazon Web Services or AWS) to power its driverless vehicles using Apache MXNet. A trip on the startup's truck utilizes roughly five terabytes of information. During such trips, AWS handles the data and distributes it to sites in Arizona and San Diego.

AWS also helped the business hone its long-range perception system. Designed to increase visibility, streamline detection and boost overall safety during operation, the robust system ensures autonomous trucks can identify objects as far as 3,280 feet.

"We would rather automate the process end to end," said Chuck Price, Chief Product Officer at TuSimple.

"We are demonstrating today in our testing and revenue runs full autonomy on these routes to deliver full depot-to-depot solutions. Our solution integrates seamlessly into existing fleet operations."

Amazon has been quietly keeping a close eye on TuSimple's milestones, suggesting deep interest in the startup's services. The online retail brand, through its AWS Machine Learning blog, previously praised the trucking company's achievements. In 2018, TuSimple was featured as an up-and-coming auto startup, along with Nauto and DeepMap, by Amazon.

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