In 2012, Amazon founder Jeff Bezos was asked by TV host Charlie Rose whether his e-commerce company would ever venture into brick-and-mortar stores. Bezos said shoppers were well-served by existing physical retailers and that Amazon wasn’t interested in launching a “me-too” product.
“We want to do something that’s uniquely Amazon,” Bezos said. “If we can find that idea, and we haven’t found it yet, but if we can find that idea, we would love to open physical stores.”
Six years later, Amazon landed on a revolutionary retail concept that it hoped would transform how people shop in brick-and-mortar stores. The company launched its first Amazon Go convenience store featuring a new kind of technology, called “Just Walk Out.”
In practice, customers would be able to load up their cart and exit the store without standing in a checkout line. Amazon soon brought cashierless checkout to its Fresh supermarkets and two Whole Foods locations. In 2020, the company began licensing Just Walk Out technology to third parties, signing on retailers in stadiums, airports and hospitals.
But the company has since taken a sideways turn.
In April, Amazon announced it was removing cashierless checkout from its U.S. Fresh stores and Whole Foods locations, a move that coincided with CEO Andy Jassy’s efforts to rein in costs to meet rapidly changing macro conditions.
In place of Just Walk Out, which typically requires ceiling-mounted cameras, shelf sensors and gated entry points, Amazon Fresh stores and Whole Foods supermarkets will feature Dash Carts. The carts track and tally up items as shoppers place them in bags, enabling people to skip the checkout line. Amazon continues to use Just Walk Out in its grab-and-go marts and UK Fresh stores.
A woman uses a dash cart during her grocery-shopping at a Whole Foods store as Amazon launches smart shopping carts at Whole Foods stores in San Mateo, California, United States on February 25, 2024. The smart shopping cart makes grocery shopping quicker by allowing customers to scan products right into their cart as they shop and then skip the checkout line.
Tayfun Coskun | Anadolu | Getty Images
The main challenge for Amazon and other startups working on autonomous checkout is the need to scale it to enough locations and retail categories that it becomes a natural part of in-store shopping, said Jordan Berke, founder and CEO of retail consulting firm Tomorrow.
“Until that’s the case, it’s an uphill battle,” Berke said. “These technology providers, Amazon included, are going to have to subsidize and continue to invest to train the retailer, train the consumer, train the market, that this is a mainstream experience that we can all trust and not need to think about as we walk in and out of a store.”
‘The hardest problem to solve’
At one point Amazon saw Just Walk Out becoming a core part of the experience of shopping in its physical stores. The company in 2018 planned to open as many as 3,000 Amazon Go stores within a few years, Bloomberg reported at the time, citing people familiar with the plans.
Bezos had assigned top talent from across the company, including a longtime Amazon executive who built the original Kindle e-reader, to work on cashierless checkout. The technology was considered a key ingredient in Amazon’s long-running pursuit to become a giant in the $1.6 trillion U.S. grocery market.
When Amazon debuted Just Walk Out in January 2018, it was a “quake moment” for the industry, causing Walmart and “almost every other retailer” to leap into action and consider developing their own vision-based checkout systems, said Berke, who previously led Walmart’s e-commerce business in China.
Amazon and other retailers soon learned that automating the checkout process is “the hardest problem to solve,” Berke said. Cashierless checkout systems require a hefty upfront investment to blanket a store with overhead cameras and hire staff to label and review shopping data.
“It meant a store had to dramatically increase its sales in order to pay off that investment,” Berke said.
Walmart teams found as part of a cost analysis in early 2019 that it would run a retailer between $10 million and $15 million to create a similar computer vision-based checkout system for a 40,000 square foot supermarket, Berke said.
Just Walk Out became an expensive project for Amazon, too. In 2019 and 2020, the company shelled out roughly $1 billion per year, including research and development costs and capital expenditures, to “learn and scale” the technology, Berke said. He said those figures are based on discussions with a former Just Walk Out executive who left Amazon to join Walmart.Amazon didn’t provide a comment on the figures.
Many retailers have since moved on from computer vision in favor of simpler methods like mobile checkout through an app, Berke said.
While it’s no longer featuring Just Walk Out as prominently in its own stores, Amazon says it has inked deals with a growing list of customers. More than 200 third-party stores have paid Amazon to install the cashierless system. The company expects to double the number of third-party Just Walk Out stores this year, Jon Jenkins, who previously served as vice president of Amazon’s Just Walk Out technology, said in a recent interview. Jenkins departed Amazon in late September to become technology chief of electric bike and scooter startup Lime, according to his LinkedIn page.
Jon Jenkins, Amazon’s former vice president of Just Walk Out technology, gives a tour of the mock convenience store where the company tests its cashierless checkout system in Seattle, Washington, on August 22, 2024.
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Jenkins disputed characterizations that Amazon’s phasing out of Just Walk Out from its own supermarkets represents a setback or a sign of the technology’s demise. He said Amazon proved through tests in its own grocery stores that the technology is “incredibly capable,” noting it deployed the system in large supermarkets with “600 people in the store at the same time.”
Other startups such as AiFi and Grabango have developed autonomous systems for supermarkets, convenience stores and other retailers, but widespread adoption has been slow, as the technology remains costly and challenging to operate in large store formats.
Inside the lab
Amazon is still fine-tuning its Just Walk Out technology.
In August, CNBC got the first on-camera look at a mock convenience store where Amazon tests the system before deploying it in third party retailers and its own stores.
The testing lab, which it calls “beverage base camp,” is located in Amazon’s Seattle headquarters. It has faux gates that mimic the experience of scanning your smartphone or credit card to enter a Just Walk Out store. The walls are lined with shelves of typical grab-and-go products like Milky Way bars, pita chips and gum, and there are coolers stocked with Coke cans and other beverages.
Amazon sets up Just Walk Out stores by first creating a 3D scan using LiDAR machines or iPads that help it determine where to place cameras so they have the clearest view.
“The goal is to have the fewest number of cameras possible, so we optimize the camera placement so that we can get enough coverage on each fixture to see what is happening in the store,” Jenkins said.
The system determines what shoppers purchased using several inputs, including the 3D scans, a catalog of product images, the video footage, and weight sensors on the shelves. Amazon in July updated the AI system behind its Just Walk Out technology to handle all the inputs in a store simultaneously.
The new “multi-modal” system can generate receipts faster by more accurately predicting which items shoppers have picked up and put back on shelves. The company said these changes should make it “faster, easier to deploy and more efficient” for retailers who install the system in their stores.
Amazon’s “primary focus” is selling the technology to third-party businesses and deploying it in small to medium-sized store formats, where the system “tends to generate a little better [return on investment],” Jenkins said. Earlier this year, Amazon also began selling its connected grocery carts to third parties.
Amazon in September announced several new third-party Just Walk Out stores at universities and sports stadiums.
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At one Just Walk Out store, inside Seattle’s Lumen Field, home to the NFL’s Seahawks, the company said it boosted sales by 112% last season, with 85% more transactions during the course of a game.
“It was awesome that we had our own stores as the laboratory to sort of build and launch this,” Jenkins said. “But over time, like many things at Amazon, the success of this project and the product will depend on third parties adopting the technology. There will always be more third-party stores in the world than there will be first-party stores.”
Amazon has used a similar playbook in in the past. Amazon Web Services, the company’s wildly successful cloud-computing unit, originated from the company’s need for IT infrastructure to support its fast-growing online retail business. And in recent years, Amazon has leveraged its logistics and fulfillment network to provide services for third parties.
With Just Walk Out, Amazon faces the challenge of convincing retailers that they can trust one of their biggest competitors with handling valuable shopper data.
In 2022, Amazon moved the team behind Just Walk Out from its retail organization to AWS. It marked one of the clearest signals yet that Amazon is serious about selling the technology to other retailers, and could help ease some fears among rivals.
“They’re clearly in sales mode,” said Sucharita Kodali, retail analyst at Forrester Research, in an interview.
Kodali said Amazon still has a “long way to go” before the technology is ubiquitous. Getting there will require patience from Amazon investors and data that shows both retailers and shoppers are embracing the technology.
“There’s almost a viral effect that will occur over time,” she said. “It’s just going to take a long time because you’ve got to cycle through everybody in America having this experience, and for the most part, it’s just Amazon fighting this fight right now.”
In this year’s flurry of massive artificial intelligence deals – for which a couple of billion dollars is pocket change – Nvidia ‘s announcement on Monday of a $2 billion investment to expand its long-time partnership with Synopsys might seem just incremental. Not so, asserted Nvidia CEO Jensen Huang, in an interview with Jim Cramer shortly after the news broke. Jensen said, “This is a huge deal.” Here’s why: Synopsys provides software and tools that allow companies like Nvidia to design, test, and verify semiconductors. Jensen said, “Nvidia was built on a foundation of design tools from Synopsys,” among others. This deal allows Synopsys, which earlier this year completed its purchase of engineering simulation software maker Ansys, to leverage Nvidia’s AI platform to deliver computer-modeled design and engineering solutions across many industries. Nvidia’s powerful chips, called graphics processing units (GPUs), are the gold standard in AI. With Monday’s deal , Nvidia will be positioned to bring GPU-powered accelerated computing to the world’s industrial sector, which represents an addressable market measured in the tens of trillions of dollars. What makes that possible is that the AI we are talking about here obeys the laws of physics, meaning that it can be relied upon to show how things will really run in the real world. Synopsys CEO Sassine Ghazi, standing alongside Jensen, said that what we’re talking about here, in a practical sense, is taking a workload that may have taken two to three weeks and compressing that to a matter of hours. Even with the work of Synopsys and other electronic design automation (EDA) providers, Jensen said Nvidia still spends “billions of dollars in prototyping” products in the physical world. “In the future, we’re going to prototype all of these products digitally so that we don’t waste any money when we build it physically,” he explained. “We could do basically the entire engineering work inside a computer in a digital twin before we have to build it at all. So, the type of products we can invent and the quality that we could do, and the speed that we could do it at is going to be extraordinary.” Jensen said that industrial companies that make things, be it Nvidia, or GM , or Boeing , spend hundreds of millions, even low billions of dollars on engineering software tools. He noted, however, that the money spent on prototyping can be 10 times to 20 times that figure. The ability to prototype digitally, therefore, represents a massive opportunity for industrial companies to reduce costs. Jensen told Jim, “This is really the culmination of everything I showed you when you visited Nvidia years ago. It’s taken this long for us to create the software stack necessary for Synopsys and the rest of the EDA [electronic design automation] industry, in order for them to accelerate the software that they’ve historically only run on CPUs [central processing units].” He added, “All of a sudden, the market opportunity increases by a factor of 10 to 100.” Jim Cramer, who started recommending Nvidia stock in 2009, first interviewed Jensen a year later. The “Mad Money” host even renamed his dog “Nvidia” in 2017 to demonstrate his belief in the company. While first bought in Jim’s Charitable Trust in August 2017 and exited in October 2018, Nvidia stock has been a constant since we re-initiated it in March 2019. More recently, Jim hosted Jensen at the Investing Club’s October Monthly Meeting, where the CEO got to meet many early Nvidia investors who made lots of money on the stock. The Trust is the portfolio the Club uses. In Monday’s interview, Jim also pressed Jensen on recent concerns about whether the launch of Gemini 3, powered by Google’s custom chips, would encroach on Nvidia’s GPU business. Google’s own semiconductors, called tensor processing units, were co-designed by Broadcom . Jensen, who complimented Google on their chips, said, “What Nvidia does is much more versatile,” dismissing the concerns and bringing the conversation back to the potential of the Synopsys investment. “You’re now seeing a real, tangible example of an opportunity that we could do with our platform that nobody else can.” AI goes far beyond the chatbots and consumer-facing solutions that have garnered most of our attention – and contributed to the pressure on shares of Nvidia since the Gemini 3 launch. Jensen said that Monday’s announcement is about revolutionizing the industrial software industry, where the stakes are much higher. On the consumer side, an answer to a query that is 90% correct, or recommends an item, movie, or new music with 90% accuracy, is a pretty good start – but on the industrial side, “that 10% you don’t get right, becomes mission critical,” the CEO added. That’s also why the pace of advancement has been so much faster in consumer AI. However, as exciting as the consumer-oriented developments have been, it’s the industrial side that likely proves to be the real opportunity. While capital expenditures by the biggest tech companies in the world to support consumer AI has, thus far, been the real driver of AI investment and infrastructure spending, the industry is now getting to the point where we should see spending ramp up elsewhere, be it from automakers like Ford and GM, or even ship builders in Korea. Not only does that speak to more spending in the years to come, but also a diversification of the spending base, which should materially help to de-risk the customer base for companies like Nvidia that have in recent years seen so much of their demand come from a select few customers. Ultimately, the move marks a significant milestone for Nvidia and the AI trade more broadly as it lays the groundwork for a material expansion in industrial AI. As we see it, the deal is a strong move for both companies. Synopsys gets to better serve its customers, while Nvidia expands its own ecosystem and helps to lay the groundwork for even more GPU-based accelerated computing infrastructure. On a conference call hosted by both companies to discuss the deal, Jensen said, “Of all the AI opportunities – industrial AI, physical AI – is the largest of all. And the reason for that is very clear. The world’s industries represent the vast majority of $100 trillion industry today. That industry, whether you’re designing cars or trains or planes or designing computers, all of that largely is based on general purpose computing. … But in order for us to go even further, in order for us to do even more, expanding the reach of design and engineering so that we could do almost everything in the world inside a digital environment, long before we create the physical manifestation, that journey, we’ve been preparing for several years now, and today our announcement really kicks it into turbocharge.” Jensen wrapped up by noting that Synopsys is the company that has allowed Nvidia to design its own chips, since its founding, and that the deal announced Monday is going to “enable everyone to design everything that’s physically manifested in the future.” (Jim Cramer’s Charitable Trust is long NVDA, AVGO, BA. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
After years of largely trading together, stocks related to artificial intelligence and the data center are starting to move in different directions, CNBC’s Jim Cramer said.
“The Google complex cohort roared while the OpenAI complex got hammered. Meanwhile, the hyperscalers with great balance sheets held up much better than the ones with strained balance sheets,” he said. “Just keep in mind that things change very fast in the AI space, so what was true last month might not necessarily stay true this month or next year.”
He pinpointed a difference in the performance of AI companies linked to OpenAI — like Nvidia, Oracle, Microsoft and AMD — and those affiliated with Alphabet — such as Broadcom and Celestica. He said latter cohort has seen a boost as some investors start to favor the newest iteration Gemini over ChatGPT. Wall Street Street at large is also growing concerned about OpenAI’s massive spending commitments, Cramer continued.
Hyperscalers with strong balance sheets are starting to pull ahead, he continued, noting that companies like Alphabet, Meta and Amazon have the capacity to keep spending big on AI. However, Cramer added, Oracle, CoreWeave and Nebius have more strained balance sheets.
But he warned that the AI space is volatile and said it’s possible another platform will surpass Gemini. Cramer also said he doesn’t want to “paint with too broad of a brush here.” For example, he noted that Nvidia got hit over worries about newfound competition and its ties to OpenAI. However, the AI giant also just reported a blowout quarter with strong guidance and demand for its products still exceeded supply, he continued.
The diversification of the AI trade is a good thing, Cramer suggested, saying it’s positive that investors are starting to think more critically about which of these companies “deserves to be winners.”
“In general, I think it’s actually pretty healthy. I’m never going to root against higher stock prices,” he said. “But there was always something unsettling about the entire AI cohort rallying in lockstep.”
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Disclaimer The CNBC Investing Club holds shares of Nvidia, Meta, Microsoft and Broadcom.
Apple’s AI chief is stepping down, the company announced Monday in the most visible shake up yet to the iPhone maker’s artificial intelligence group since launching its Apple Intelligence suite in 2024.
John Giannandrea, who held the position since joining the company in 2018, will be replaced by Amar Subramanya, an AI researcher who most recently worked for Microsoft and was previously part of Google’s DeepMind AI unit, according to his LinkedIn profile.
Giannandrea was a senior vice president and reported to Apple CEO Tim Cook. He will continue to serve as an advisor until retiring next spring, Apple said.
The change comes as experts this year have said Apple has fallen behind its tech peers in artificial intelligence, a tech field that has been reinvigorated since OpenAI launched ChatGPT in 2022.
Apple Intelligence, which was intended to put Apple alongside AI leaders like OpenAI and Google, has not been well-reviewed by users and critics. Earlier this year, one of its most critical aspects, a significantly improved Siri assistant, was delayed until 2026, signaling development challenges.
Subramanya will serve as Apple’s vice president of AI, and will report to software chief Craig Federighi, the company said.
In a statement, Cook said Federighi has already been playing a key role in Apple’s AI efforts.
“In addition to growing his leadership team and AI responsibilities with Amar’s joining, Craig has been instrumental in driving our AI efforts, including overseeing our work to bring a more personalized Siri to users next year,” Cook said in a statement.
Subramanya will lead teams working on Apple’s foundation models, research and AI safety. Other teams previously under Giannandrea will move under COO Sabih Khan and services chief Eddy Cue, Apple said.
Although Apple shares are up 16% in 2025, they have lagged many other big tech companies as investors say the iPhone maker has fallen behind its peers that are investing billions into AI data centers, chips and frontier models.
Apple said in August that it was “significantly increasing” the amount it spends on AI, and Cook has said it’s a “profound” technology. Apple has struck a deal with leader OpenAI to integrate ChatGPT into some of its products, like Siri.
But Apple is playing a different game than companies like Microsoft, Google, and Meta. It’s spending much less on infrastructure for the technology. Apple also prefers its AI to run on its devices, instead of communicating back to more powerful computers in the cloud.
Apple this year also saw Jony Ive, its legendary hardware designer who helped late co-founder Steve Jobs invent the iPhone, sell his startup io for $6.4 billion to OpenAI, with the intention of helping the AI lab release its own hardware.
Analysts say that Apple has built a loyalty moat among its customers since the iPhone launched in 2007, but AI-driven hardware is on its way, with Ive and OpenAI CEO Sam Altman last month saying that they’ve already completed their first prototypes and could reveal them in two years or less.
