Alphabet (GOOGL) To Sell Robotics Division To Toyota

Per reports from Tech Insider on Friday, Alphabet Inc. (NASDAQ:GOOGL) is selling its robotics division Boston Dynamics to Toyota Research Institute, a division of Japanese automaker Toyota Motor Corp. (NYSE:TM) .

The financials of the deal have not been disclosed yet, but according to Tech Insider sources, it’s almost finalized.

According to an earlier report from Bloomberg in March, Amazon.com (NASDAQ:AMZN) and Toyota Research Institute were the potential buyers.

Google acquired Boston Dynamics in late 2013 as a part of its robotics division, Replicant, which makes humanoid and animal-like mobile robots customized for military purposes.

The primary architect of Replicant was Android founder Andy Rubin under whose leadership eight robotics-related companies were bought by Google in 2013. Under Rubin, the division was preparing for its first consumer product launch in 2020. However, the process was obstructed with Rubin’s departure in 2014.

Additional issues cropped up when the Boston Dynamics team started facing problems working with Google robotic engineers in Tokyo and California while developing a new range of products including the "low-cost quadruped robot.”

With all these, Google executives became skeptical about the revenue-generating capacity of Boston Dynamics. They also feared that humanoids could take human jobs.

In December, after its reorganization into Alphabet, Google announced the decision to fold Replicant into Google X hardware lab. Boston Dynamics was not made a part of this fold and instead put up for sale.

One of Tech Insider’s sources called this deal a “friendly buyout” considering Boston Dynamics’ long-time relationship with the Toyota Research Institute.

The deal appears to be a win-win situation for both Google and Toyota. Google will be able to cull what appears to be a problematic and non-revenue generating operation while Toyota Research Institute will be in a position to use Boston Dynamics’ expertise for developing robots for industrial or personal use.

At present, Google has a Zacks Rank #3 (Hold). A better-ranked stock in the broader technology space is CommVault Systems, Inc. (NASDAQ:CVLT) , sporting a Zacks Rank #1 (Strong Buy).