Yesterday, I was shopping in my local BJ’s Warehouse club. I turned the corner down a new aisle and halfway down was this skinny machine that looked like a taller version of an oscillating vertical heater, and it was moving in my direction. As I got closer it started emitting a chime that unlike most warning sounds was rather pleasant and not intrusive.
It had graphics on it that identified it as Tally, the Inventory robot. It moved slowly down the aisle, stopping at each skid for a few moments and then moving on to the next. It was very unobtrusive to shoppers.
Having a keen interest in AI robotics, I did some research. It is manufactured by Simbe Robotics, a non-public company, that appears to have completed a few rounds of private equity capital raising. Simbe also makes a similar robot for Stop and Shop supermarkets, called Marty.
The robot is part of a system that does inventory tracking, out of stock management, and planograms (making sure things are where they should be). According to Simbe, it can scan 15 to 30 thousand items per hour, with a claimed 99% accuracy rate, compared to humans at about 65%.
I wondered what it cost? While Simbe and BJs were tight lipped, some sources claimed the Stop and Shop version was $35K per copy. This would be plus maintenance and repair, electricity, and the software to make the system work. My BJ’s is open 96 hours per week. If a $15/hr worker was assigned to this, it would cost them about $82K per year (including 10% for FICA and Workman’s Comp).
It seems the age of the affordable AI robot is upon us. How long will it be until we get its big brother that restocks the shelves? If all of this seems like a great place to invest in the next wave of productivity and economic growth, it is. Accessing investments like this is another matter.
As a non-public company, Simbe and other similar companies can only directly solicit investments from “Accredited Investors” (meaning already successful). As they get larger, additional funding comes from private equity firms and funds, who’s investors are not only accredited, but can also pony up rather large minimum investments, often, $500K, $1MM, or more. It often puts the most exciting and ultimately successful investments beyond the reach or access of almost everyone.
The first time the general public gets to invest is the IPO, where they are buying out the private equity, which have usually made the lion’s share of gains for the foreseeable future. Sadly, the game is rigged against most investors by the SEC, who is protecting the public from having an opportunity to make potentially life changing investments in the private market. Thank your elected officials for their help.
The Bottom Line: AI Robotics is the real deal.
–Michael Ross, CFP®