Amazon has announced that it is hiring three of the founders from Covariant, a Bay Area startup that specializes in developing AI for advanced warehouse robotics systems. As part of the arrangement, Amazon will receive a non-exclusive license to Covariant’s AI models, while Covariant will continue to operate. The three co-founders – former OpenAI researchers Peter Chen, Pieter Abbeel, and Rocky Duan – along with about a quarter of Covariant’s employees are expected to join Amazon. This deal mirrors a similar agreement made by Amazon earlier in the year when it hired the founders of Adept, a startup focused on building AI agents for enterprise workflows.
Other tech giants are also following this strategy of bringing in AI experts from smaller startups. Microsoft, for example, hired Mustafa Suleyman, co-founder of consumer chatbot startup Inflection AI along with other employees. These deals are being described as “reverse acquihires,” where the hiring and licensing of AI talent from smaller companies can be seen as acquisitions in disguise. However, regulators have been keeping a close eye on these types of deals, with Amazon reportedly facing inquiries from the U.S. Federal Trade Commission related to its acquisition of Adept.
Covariant, based in Emeryville, California, was founded in 2017 and focuses on AI-powered robotics systems through its “Covariant Brain” platform. The company’s technology is used to automate warehouse tasks such as order picking, sortation, item induction, and depalletization. Covariant’s current COO, Ted Stinson, will become CEO, and another co-founder Tianhao Zhang will help lead the company. Customers of Covariant include major companies such as McKesson, Otto Group, and Radial.
Amazon’s move into warehouse robotics began over a decade ago with the acquisition of Kiva Systems. The company has since developed its own line of warehouse robots to automate operations and speed up deliveries. However, the increased use of robotics has raised concerns about worker safety in Amazon’s fulfillment centers. While Amazon has disputed claims that robots lead to higher injury rates, the company has shared data showing lower incident rates at its robotics sites compared to non-robotics sites, suggesting that automation has benefits for safety and efficiency.
Covariant has raised a total of $222 million in funding, with a recent $75 million Series C round led by Radical Ventures and Index Ventures. The company has over 160 employees, with about 25% expected to join Amazon’s Fulfillment Technologies & Robotics team. Amazon has stated that Covariant’s AI models will enable new ways of training robotic systems and provide opportunities for increased automation to enhance safety and customer delivery. The financial terms of Amazon’s AI licensing deal with Covariant have not been disclosed, but the move is seen as a strategic investment in advancing Amazon’s robotics capabilities for its fulfillment operations.
