Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) decided to sell Boston Dynamics; its subsidiary focused on developing advanced robots with remarkable behavior such as agility, dexterity, mobility and speed.
Bloomberg first reported that Boston Dynamics is up for sale based on information from people familiar with the situation. Some of the potential buyers include Amazon.com (NASDAQ:AMZN) and Toyota Research Institute (TRI), a unit of Toyota Motor Corp (NYSE:TM) (TYO:7203).
Amazon is developing robots for its fulfillment center. Toyota is investing $1 billion to build a new R&D unit in Silicon Valley and will be focusing on artificial intelligence and robotics. The company also appointed former DARPA program manager Dr. Gil Pratt as CEO of TRI.
According to the sources, Alphabet executives are focused on ensuring that all of the companies under its corporate umbrella have plans to generate real revenue. They concluded that it was unlikely for Boston Dynamics to produce a product that could be sold in the market and make money over the next few years.
Tension between Boston Dynamics and Google’s robotics group
Alphabet acquired Boston Dynamics in 2013 as part of its series of acquisitions in the field of robotics. Andy Rubin, the former chief of Android division led the transactions, which brought in around 300 robotics engineers to Google. Rubin left the company in 2014.
Google’s robotics initiative called Replicant struggled after Rubin’s departures and failed to recruit a new leader. A person familiar with the situation said one of the main reasons behind Replicant’s problem was the reluctance of the executives at Boston Dynamics to collaborate with Google’s other robotic engineers in California and Tokyo.
The tension between Boston Dynamics and Google’s Replicant group were revealed within the search engine giant when the minutes of a November 11 and subsequent e-mails were unintentionally published in an internal online forum.
Jonathan Rosenberg, an adviser to Alphabet CEO Larry Page and a former senior vice president at Google, headed the November meeting. He was temporarily in charge of the Replicant Group at the time.
During that meeting, Rosenberg said, “We as a startup of our size cannot spend 30-plus percent of our resources on things that take ten years. There’s some time frame that we need to be generating an amount of revenue that covers expenses and (that) needs to be a few years.”
The minutes of the November meeting also indicated Aaron Edsinger, director of robotics at Google in San Francisco, had been trying to work with Boston Dynamics to develop a low-cost electric quadrupled robot, but he felt “a bit of a brick wall” around the division.
On the other hand, Boston Dynamics founder Mark Raibert said, “I firmly believe the only way to get to a product is through the work we are doing in Boston. I don’t think we are the pie in the sky guys as much as everyone thinks we are.”
In December, Alphabet decided to combine Replicant with Google X, its advanced research group. Google X head Astro Teller told Replicant employees that they would be given other assignments if robotics are not the practical solutions to the problems that Google is trying to solve.