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Why Google wanted to sell — and Softbank wanted to buy — Boston Dynamics, which makes crazy robots

Boston Dynamics’ robots can lurch like a human, sprint on all fours like a canine and navigate around small spaces like a spider. Though the machines look like sci-fi villains, Google once saw in them an opportunity, snatching up the start-up for an undisclosed amount in 2014.

But the robots now have a new owner. Google’s parent company, Alphabet Inc., sold Boston Dynamics to SoftBank Group Corp. in a deal announced Friday that also includes Schaft, a maker of walking robots. The sale — whose price was not disclosed — illustrates the diverging strategies of the Mountain View, Calif., search giant and the Japanese conglomerate.

SoftBank is a global technology company with holdings in telecommunications — including an 83% stake in Sprint — Internet service and clean energy. But it also dabbles in robotics with its chatty, childlike Pepper companion robot.

SoftBank Chief Executive Masayoshi Son said robots will help solve problems beyond human capabilities. “Smart robotics are going to be a key driver of the next stage of the Information Revolution,” he said in a statement about the purchase.

Though SoftBank has already made investments in robotics, including the 2012 acquisition of French firm Aldebaram Robotics SA, those efforts have yet to deliver hit products or much financial gain.

But if humanoid robots take off anywhere, it will be Japan, where consumer-focused cyborgs are already a growing industry. With its longtime culture of cartoons such as “Astro Boy,” Japanese consumers are more open to interacting with robots than customers in other markets. Various Japanese companies, including automakers Toyota Motor Corp. and Honda Motor Co., have developed entertainment robots, designed to do nothing more than keep people company.

SoftBank’s Pepper, available only in Japan, has expressive arms but wheels for legs and does little more than sing songs and answer basic questions. It can't do any heavy lifting and often fails to understand even simple spoken prompts.

“It looks like SoftBank needs to really beef up its robotics expertise if it wants to be a player in this space — which is what these two acquisitions should start to accomplish,” said Richard Windsor, institutional analyst at Edison Investment Research.

It remained uncertain Friday if Boston Dynamics would remain within SoftBank or become part of the Vision Fund, the mammoth $93-billion technology investment fund started by Son.

For Google, the sale allows the company to shed a holding that’s disconnected from its core business. The firm is famous for testing far-fetched ideas that, if viable, could open up new avenues for revenue.

But walking robots, analysts, say, were not one.

“At the end of the day Alphabet is a data and analytics company whose objective is to categorize and understand every piece of digital information that users generate and to sell those insights to marketers,” Windsor said. “These robots can move around with relative ease, but how they would be able generate value for Alphabet shareholders was always unclear.”

Alphabet also recently sold satellite business Terra Bella, including its satellites currently in orbit. But it’s not giving up on other potentially ground-breaking ventures that strain credulity, dubbed moonshots. Those include Project Loon, which would use balloons to deliver Internet service, and Foghorn, which would make a new type of liquid “sea fuel” out of seawater.

“Robotics as a field has great potential, and we’re happy to see Boston Dynamics and Schaft join the Softbank team to continue contributing to the next generation of robotics,” an Alphabet spokesperson said.

Despite the sale, Alphabet said it remains committed to robotics, such as connecting human-like motor skills — including hand-eye coordination — to machines so they can process images, speech, text and draw pictures. Those skills have more obvious links to Google’s existing products.

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UPDATES:

3:50 p.m: This article was updated throughout and adds comments from Richard Windsor, institutional analyst at Edison Investment Research.

9:40 a.m.: This article was updated with comments from Alphabet and additional details.

This article was originally published at 3:40 a.m.

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