These danger-seeking robots show how Microsoft could benefit from Trump's infrastructure boom
President Donald Trump has promised to unveil a $1 trillion infrastructure plan this year, a proposal that was in focus last week as Washington observed "infrastructure week" — even if it was overshadowed by a flurry of other political news.
Trump's infrastructure plans, plus his promises of a manufacturing renaissance, are expected to be a boon for industries like transportation and engineering.
But they could also benefit some less-expected sectors: robotics start-ups and the cloud companies that work with them.
"Compute and storage utilities, I think this is going to enable massive innovation by all sorts of companies, not the least of which are all the industrial companies that can lever and take advantage of the massive investments that Google's making, Amazon's making, Microsoft's making, and machine learning that's in the cloud," Altimeter Capital's Brad Gerstner told CNBC earlier this month.
Building roads and bridges may seem outside the purview of big technology companies like Amazon (NASDAQ: AMZN) and Google (NASDAQ: GOOGL). But when an industrial company wants to make a model of, say, when a bridge will corrode, it can use data from the sensors on a robot, and send that data to be crunched in the cloud, said Ben Wolff, CEO of robotics company Sarcos.
'The golden age of robotics'
Sarcos is one company that thinks it can get a boost from the infrastructure and manufacturing boom.
The Utah-based robotics company makes rugged machines that can explore areas where humans can't — or shouldn't — enter safely, like tunnels, pipes, corroding bridges and under automobiles.
"Every time we use the robot, it may be a different environment. Inspecting a bridge one day, a refinery tank, the welds inside a shipping container," Wolff said. "In a nutshell, if the infrastructure plan goes forward it creates a lot of opportunity for Sarcos . One thing that will be critical is evaluating the useful life of some of the remaining infrastructure."
The Guardian S, one of Sarcos ' robots, is a 13-pound snake-like all-terrain machine, powered remotely by human engineers. The Guardian XO, still in development, claims to be the world's first "fully powered industrial exoskeleton," an "Iron Man"-like suit that helps the wearer lift 200 pounds "repeatedly without exertion, strain or injury."
Another factor in Sarcos ' favor? The company isn't trying to replace human productivity: "[W]e enhance it, by making you stronger, keeping you safer and getting you places you couldn't otherwise go," a description said.
That's key, because central to Trump's promises are the jobs they will create. Last year, The New York Times asked Trump if bringing back manufacturing to the U.S. would push up costs and spur companies to turn to automation.
"It's a big thing, we'll make the robots, too," Trump said. "Right now we don't make the robots. We don't make anything."
According to Wolff, Sarcos ' robots are designed for unstructured environments, not the factory floor. But that also means that they're less likely to replace rote jobs.
"Before the forklift or before the power drill, we had humans doing the work and they had to lift the heavy things on their own, and there was more danger involved," Wolff said. "So I think we look at the robots as really the next level of innovation — tools in the workplace that enhance safety."
While Trump's plan has been criticized as dated, in some ways it couldn't be timed better for tech companies like Sarcos , and its partner, Microsoft (NASDAQ: MSFT).
Wolff said advancements in critical technologies like cloud computing and machine learning, the falling prices of computer vision sensors, and the smaller, faster chips and batteries on the market have created an opportunity for industrial companies to leverage robots in a way they could not have done even five years ago.
"I call this the golden age of robotics," Wolff said. Technology has advanced so that the costs of components have come down dramatically."
Microsoft, Amazon and the race to win the cloud
Once a Sarcos robot collects the data, that's where the cloud comes in.
Microsoft's sales team courts industrial companies like Sarcos with its Azure platform, and has built a lab in its Redmond, Washington, headquarters where companies can take their products and work with Microsoft to get everything connected to the cloud, Wolff said.
But Microsoft is not the only cloud provider vying to break into the industrial space.
"While I am sure that [Microsoft] is positioning itself for growth in the manufacturing sector, there are other options — and there are many manufacturing customers that are using those options," said Crawford Del Prete, marketing research agency IDC's chief research officer. "I think the real value for MSFT is in the developer networks, and in their ability to attract developers from industries to Azure."
IDC's Bob Parker added that Microsoft's team "are far from the only suitable (or even the best) option in manufacturing."
As money pours into industrial projects across the United States, competition to win cloud contracts could get fierce.
"We're at the beginning of something that is going to grow much much bigger over the next 10 years. Some places will be quite affected by automation," said Robert Seidl, managing partner at Motus Ventures, a Bay Area firm that invests in transportation, robotics and urban planning. "There's a very large market opportunity in automotive. Then more broadly, the kinds of things that happen in technology. Not just driving and people-moving, but warehouses, packing and unpacking, and delivery, inspection in oil and gas, infrastructure inspection."
Seidl said he's not counting on an infrastructure boom to boost his portfolio. Plus, he said, there's a limited window: As computers get smaller and more powerful, more data can be crunched directly by the robots themselves.
"I think it's worth being cautious about funding [until it] actually happens. American governments have been notoriously underfunded when it comes to infrastructure," Seidl said. "We always tell our founders, 'Do not rely on other start-ups as customers, and don't rely on the government as your only customers. Funding can evaporate if there is an election.' That's a challenge for start-ups."
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