Boston Dynamics was purchased by Hyundai from Softbank on 21 June, 2021 for a value of $1.1bn. However, as the industry leading firm is passed around between tech and manufacturing giants, the end game for profitable products is improved but still unclear under the new ownership.
Hyundai has picked up an 80% controlling stake in Boston Dynamics with Softbank retaining a 20% share. Softbank purchased the firm itself from Google in 2017 for only $165m and so the deal represents a tidy profit for Softbank that has been going through significant difficulties in 2020, as its most prestigious firms such as Uber and WeWork suffered heavily.
Boston Dynamics has existed on research grants previously
Boston Dynamics has existed since 1992 when it was spun off from MIT and has been essentially living off subsidies from the Defense Advanced Research Projects Agency (DARPA) until Google took an interest and purchased the firm in 2013. However, this interest from Google was short lived and in 2017 the firm was sold to Softbank.
While this ownership dance was continuing, Boston Dynamics has been doing revolutionary work in the field of Robotics. Its videos became internet sensations as its prototype robots were shown completing extraordinary tasks, such as navigating difficult environments, interacting with humans, completing feats of strength and agility and even dancing.
While the firm has undeniably achieved remarkable things with its technology, the end goal for the robots it produces has always been less clear. In 2020, the firm started selling its first product, the robot dog called “Spot” for $74,500 and has apparently sold “hundreds” of these units, including to SpaceX.
Hyundai will certainly be able to help production, but what is the business model?
The upside of this deal is that the South Korean conglomerate has all the manufacturing capacity and expertise that Boston Dynamics will ever need. Almost certainly this deal will allow costs to come down and the line of products to be easily expanded.
Hyundai also has interests in a wide variety of sectors, not just automotive, including businesses in construction, manufacturing equipment, trains and military equipment. This means that if there is a sector that can use Boston Dynamics robotics to the full, Hyundai will almost certainly be able to find it.
The problem is, finding that route to market is still not obvious. Ostensibly, Hyundai has purchased Boston Dynamics for its mobility business, but quite how this line of robots might apply to mobility is unclear as of yet.
What might be more promising for Hyundai is that Boston Dynamics is focusing on warehouse robots that can break down pallets and robotic arms that can handle boxes, perhaps taking the load away from human operators in its factories.