Amazon (AMZN) - Get Report may be looking to up its artificial intelligence game, according to a new report from Bloomberg, which claims that the e-commerce giant quietly bought a startup called Orbeus.
Orbeus developed technology that uses artificial intelligence to identify content in photos, and Bloomberg's source claims that Amazon acquired the startup in the fall of 2015.
While neither company confirmed the report, Bloomberg noted that the Orbeus domain name is now owned by Amazon Hostmaster. And Orbeus' website currently says, "ReKognition API is no longer taking new customers ... But we're up to new/exciting things."
It's unclear what Amazon's exact plans for Orbeus' technology are, but there are several ways it could be helpful.
First of all, it could be useful for Amazon's cloud computing business, Amazon Web Services. Wedbush analyst Michael Pachter noted that the image recognition features may be useful as a security measure for AWS.
Pachter also thought Orbeus could fit into other Amazon businesses as well.
"It could be consumer, it could be commercial, it could be security," he said. "Image recognition fits into their gaming strategy (not well defined) with Fire TV, it fits into their device strategy with Kindle and the not-yet-abandoned Fire Phone."
The last possible use case for Orbeus' technology would be in the warehouse. Amazon is very focused on automation in its warehouses, so perhaps the technology could do something like enable its Kiva robots to recognize items and move them to sorting stations.
"Between this and the rumors of Amazon potentially taking a stake in German digital mapping company HERE, it appears that Amazon is investing in technologies that could potentially automate parts of its logistics and fulfillment infrastructure," Morningstar analyst RJ Hottovy said. "I view these as sound investments that solidify one of Amazon's competitive advantages as a technologically-dominant logistics company, and would expect more acquisitions in early-stage technologies like this in the future."