Iconic Boston Dynamics Robots Seek Stable Employment

(Bloomberg Businessweek) -- Human baseball fans weren’t allowed to attend the Fukuoka SoftBank Hawks game on July 7, but that didn’t keep a collection of humanoid robots from supporting the home team with a peppy fight song while 20 mechanical dogs in baseball uniforms bopped along in unison. The canines were made by Boston Dynamics, and their performance perfectly illustrated the conundrum the company has faced since its founding almost three decades ago: It’s created what may be the world’s most technologically sophisticated—and expensive—parlor trick.

Boston Dynamics has long represented the cutting edge of robotics in popular culture, captivating YouTube audiences with the fluid movements of its animal- and human-like machines. It’s had bouts of profitability over its 28 years of existence, but recently has been losing millions of dollars a year, vexing SoftBank Group Corp., as it did its previous owner, Google. SoftBank is now preparing to sell it to Hyundai Motor Co. for about $1 billion, Bloomberg reported earlier this month.

The deal isn’t complete and would require approval from the Committee on Foreign Investment in the United States. Hyundai and SoftBank declined to comment, and a spokeswoman would only say that Boston Dynamics “continues to excite partners interested in exploring a deeper commercial relationship with our company.”

Boston Dynamics also recently changed its longtime leader and hired its first head of sales. Chief Executive Officer Rob Playter is a former collegiate gymnast who wrote his PhD thesis on techniques for teaching robots to do somersaults. In an October interview, he said SoftBank was looking for profits. “While they want us to be a disciplined and commercial company, the actual direction of the company they are leaving to us,” he says. “Pressure? Sure, there’s pressure.”

Playter became CEO late last year, replacing Marc Raibert, who founded Boston Dynamics in 1992. It was an outgrowth of his academic work on walking robots at the Massachusetts Institute of Technology. Under Raibert’s leadership, the company developed an increasingly impressive series of machines that moved in smooth, eerily lifelike ways. Many were funded by the Defense Advanced Research Projects Agency and other arms of the U.S. military. In 2012, Boston Dynamics developed a robot called Cheetah that, along with its successor WildCat, could run faster than Jamaican sprinter Usain Bolt. Another, called Atlas, resembled a person in an astronaut’s suit and could perform backflips.

Google purchased Boston Dynamics in 2013 and cut short the company’s military contracting work to focus on research and development. Owning the company cost Google about $50 million annually, according to a person familiar with the matter who asked not to be identified discussing private information. Those losses began to wear on Google when Andy Rubin, its biggest internal champion of robotics, left in 2014 following an allegation of sexual misconduct. Google started shedding unprofitable businesses the following year and sold Boston Dynamics to SoftBank, a famously deep-pocketed tech investor, in 2017. The price wasn’t disclosed at the time, but two people familiar with the matter say SoftBank paid about $165 million.

Because of the potential military applications, the sale needed approval from Cfius. The agency stipulated that executives at the Japanese conglomerate couldn’t hire or fire management, direct the product road map, or have access to Boston Dynamics’s intellectual property, according to people familiar with the matter.

By then the machines had started to seep into popular culture. In 2017 the popular Netflix show Black Mirror debuted an episode featuring robot dogs trying to hunt down people in a postapocalyptic world; creator Charlie Brooker later said it was inspired by Boston Dynamics videos. The company’s latest robotic dog model, Spot, has also become a YouTube sensation. In one 2018 clip with more than 60 million views, one of the yellow, four-legged machines is thwarted by the knob as it tries to open a door. Another version of Spot, this one equipped with a mechanical hand, turns the handle, and the pair pass through. Although the robots trot along amiably enough in the video, many viewers likened it to a scene from Jurassic Park in which velociraptors learn to open doors, to terrifying effect.

Boston Dynamics joined a disparate collection of robotics ventures in SoftBank’s portfolio, including developers of robots for warehouses, restaurants, and other industrial applications. Its staff tripled, to 300 people, and it has moved into new headquarters in a refurbished former postal building in Waltham, Mass., at a cost of $20 million, according to a person familiar with the matter.

But paying for the robot company’s operations cost SoftBank upwards of $150 million annually, one person familiar with the matter says. SoftBank’s appetite to bankroll flashy, money-losing businesses was weakened last year when one of its biggest investments, the coworking startup WeWork, saw its planned initial public offering theatrically crash and burn. The pressure on Boston Dynamics increased further with economic strain related to the Covid-19 pandemic.

Late last year, SoftBank made a new push to steer the robot maker toward profitability, accelerating an effort that had started under Google. With SoftBank’s encouragement, Boston Dynamics promoted Playter, who had been its chief operating officer, and hired its first head of sales from Honeywell International Inc. The move wasn’t mandated by SoftBank, Playter says, describing the changes as a logical development after years of internally funded R&D under Google. “Since the SoftBank acquisition and with the maturation of the Spot robot, the company has resumed commercialization of our technologies,” he says. The billion-dollar price tag would be justified largely by progress on applications like these.

Last month the company played host to 800 virtual attendees at its first customer and developer conference. The event focused on its robots’ potential to do more than delight and terrify YouTube viewers. Videos showed Spot conducting dangerous power plant inspections of pipes, monitoring a thermal exhaust treatment facility, and taking temperatures of Covid-infected patients at a Boston hospital.

Some of these things are already happening. The company has sold about 400 of the machines, which start at $75,000 each, bringing in at least $30 million in revenue. Architectural giant Foster + Partners is testing out a Spot robot topped with a scanner to track progress at building sites. The robot is safer than the drones the company has tried for the same tasks, has longer battery life, and elicits more favorable reactions from human staffers, according to Foster partner Adam Davis.

These capabilities are impressive but hardly unique to Boston Dynamics, says Remy Glaisner, a Boston-based robotics analyst at International Data Corp. “The applications they are right now displaying, it’s not just that there are other types of robots that do that, and probably do that much better,” he says. “It’s more about, ‘Could those robots do something we haven’t thought of yet?’ ”

Playter says he’s most excited about a robot called Handle, which Boston Dynamics won’t release for sale for two years. Handle, which spins adroitly on two large wheels, is designed to automate tasks like moving boxes on and off pallets and perhaps even unloading boxes from trucks, a notoriously tough task for a robot. These may be the kinds of unglamorous tasks the company focuses on if the sale to Hyundai goes through. But the carmaker, which has experimented with ideas for walking cars, could also have an interest in the company’s quadruped technology.

The robotics industry’s lack of an obvious leader leaves room for Boston Dynamics robots to mature into more than automated baseball fans, according to Glaisner. “There’s no Google of the robotics industry,” he says. —With Kyunghee Park
 
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