Amazon (NASDAQ:AMZN) has signed an agreement to buy Zoox, a six-year old start-up seeking to create autonomous driving vehicles from the ground up. Amazon is reportedly paying over $1.2 billion, which is one of its largest acquisitions, other the the notable 2017 purchase of Whole Foods for $13.7 billion. 

Zoox, which was founded in 2014, was valued at $3.2 billion in July 2018. But the COVID-19 pandemic halted testing and forced the company to lay off 100 people, or approximately 10% of its workforce, according to a Financial Times report. 

driverless car interior with autonomous controls lit up

Image source: Getty Images.

Amazon said it will be keeping Zoox CEO, Aicha Evans, and co-founder and CTO, Jesse Levinson, to run Zoox as a stand-alone business under Amazon. "Zoox is working to imagine, invent, and design a world-class autonomous ride-hailing experience," said Jeff Wilke, Amazon's CEO, Worldwide Consumer. 

Co-founder and CTO Levinson said that in its six years of work, Zoox has focused solely on a "ground-up approach to autonomous mobility." He added, "Amazon's support will markedly accelerate our path to delivering safe, clean, and enjoyable transportation to the world."

To date, Zoox has been working toward totally autonomous zero-emissions vehicles to be used as for ride-hailing services. The Financial Times report quoted a Morgan Stanley (NYSE:MS) analyst as estimating that Amazon could save up to $20 billion per year, with a "more efficient long-term delivery network" using Zoox technology.