Hyundai has recently bought a controlling stake in Boston Dynamics from SoftBank.

The Massachusetts-based robot maker Boston Dynamics announced last week that it was becoming part of the South Korean Hyundai family. The acquisition is subject to all the standard regulatory requirements and formal approval inherent in international acquisitions.

Some observers are shaking their heads because in its 28-year existence, Boston Dynamics has struggled to make a profit. In fact, the company has been losing millions of dollars a year for several years in a row.

Deal Details

The mega $1.1 billion deal will have Hyundai Motor Group acquire an 80% stake in the company. SoftBank will control the remaining 20%.

Boston Dynamics started in 1992 when it spun out of the Massachusetts Institute of Technology (MIT). The majority of the company’s success and viral fame has come in recent years with the development of life-like robot solutions. Boston Dynamics has created “Atlas,” which is a humanoid robot that can run and do backflips and “Spot,” a robotic quadrupedal “dog” that has been assisting healthcare workers during the ongoing coronavirus pandemic.

In June of 2020, Boston Dynamics started selling Spot the robot dog for $74,500 a piece. Spot was its very first commercialized product over 25 years in the making. There are more plans for commercial products in the near future, as Boston Dynamics has already started testing “proof of concept models” of a logistics robot, “Handle” with select partners in real-world warehouses.

The Journey of Robot Maker Boston Dynamics

Boston Dynamics was at one time under Google, where the focus was primarily on research and development. Google sold the robot maker to SoftBank in a deal that then-CEO Marc Raibert said was intended to “push the boundaries of what advanced robots can do.”

The company has rolled out “Atlas,” a humanoid robot with arguably more agility than many actual humans. With this innovation, the company undoubtedly has achieved this goal. And although it’s unconventional for a company to change hands so many times in such a short space of time, those rapid-paced moves have been anything but unsuccessful.

Each new owner has served a specific function to help grow the company’s bottom line. Google provided resources for exploration. SoftBank helped bring products to market. And Hyundai will bring the engineering and manufacturing knowledge and resources needed to scale up and allow more innovation.

Value in Robot IP

While this may have been an issue for Google and SoftBank, Hyundai, given its history, is likely to see more value in Boston’s robot intellectual property and be willing to ride out bumps in the on what will most certainly be a long road to profitability. SoftBank also can appreciate Boston Dynamics’ long-term potential, as it will hold on to a 20% stake when the deal is complete.

Hyundai is focused on Boston Dynamics’ technology. As the official press release states, the company’s status as “the established leader in developing agile, mobile robots that have been successfully integrated into various business operations.”

Boston Dynamics possesses valuable technology and intellectual property that Hyundai could leverage to realize its goal of transforming into a “smart mobility solution provider.”

“The synergies created by our union offer exciting new pathways for our companies to realize our goal—providing free and safe movement and higher plane of life experiences for humanity,” said Hyundai Chairman Euisun Chung.

SoftBank Has Been Busy

This robot making transaction is the latest in a number of notable sales by the Japanese multinational conglomerate holding company SoftBank. Earlier this fall, SoftBank made announced the sale of Arm Holdings to NVIDIA for $40 billion. Nvidia Corp.’s purchase of the UK-based chip designer Arm from SoftBank is said will reshape the global semiconductor sector.

The sale places a vital supplier to Apple and others across the industry under the control of a single player. Observers expect the deal to face pushback from regulators and rivals to Nvidia. Nvidia is the largest U.S. chip company by market capitalization.

Nvidia CEO Jensen Huang stressed at the time of the merger announcement that Arm would keep its neutral licensing model and expand it by licensing Nvidia’s intellectual property for the first time.

“We want to grow Arm and make it become even greater,” he told analysts on a conference call.

Softbank’s sale marks an early exit from Arm. It acquired for $32 billion. CEO Masayoshi Son commented that Softbank had overhyped the potential of Arm. But the company was cutting its stakes in major assets to raise cash.

Nvidia expected to pay SoftBank $21.5 billion in shares and $12 billion in cash, including $2 billion on signing. The deal will see SoftBank and its $100 billion Vision Fund, which has a 25% stake in Arm, take a stake in Nvidia of between 6.7% and 8.1%.