'Fast-Moving Train': Prologis Turns To AI To Power Logistics, Site Selection
Prologis is delving into artificial intelligence to further its goal of expanding its logistics business, company executives said during its annual Groundbreakers event on Wednesday.
“We're going to be known as more of a logistics solution provider than just a real estate company,” CEO Hamid Moghadam said during the conference, as reported by CoStar. “Real estate is the foundation and the bedrock of our business, but I think with all of these additional things, we're going to meet more and more needs of our customers so they don't have to go anywhere else.”
Moghadam further characterized AI as a “fast-moving train” and said companies need to board it — or be run over.
“Before you can engage with AI and get value out of it, you have to have data and you have to have data digitized," Moghadam said.
Prologis on Tuesday announced its investment in Dallas-based AI software startup TestFit and its deployment of the software in its operations.
Prologis Ventures, the company's investment arm, co-led a $20M Series A round of investment in TestFit, along with Parkway Venture Capital and Perot Jain.
TestFit will help the company assess new warehouse sites, according to a release. The startup is already active in the multifamily sector as a real estate feasibility platform for developers, architects and contractors.
Prologis has been piloting TestFit software to compile information on the design and evaluation of construction, as well as forecasting costs for new logistics sites.
“TestFit has helped existing customers speed up their site planning by as much as ten times,” TestFit co-founder and CEO Clifton Harness said in a statement. “It’s incredible to see the success we’ve seen in multifamily applied in the industrial space.”
Another recent tech investment by Prologis was in Chicago-based Site Technologies, an asset management and property data analytics company employing AI. In that case, Prologis Ventures led a $10M Series A round of funding, along with Protagonist and DivcoWest Ventures.
The industrial REIT is expanding Site Techologies in its locations across the Americas and into its European portfolio. Prologis owns about 1.2B SF in 19 countries.
AI is essential to logistics, according to Locus Robotics Vice President of Corporate Development Gina Chung, who also spoke at the conference. Prologis was an early investor in Locus.
"In our largest installations, we have over 700 robots operating, picking orders every single day, every single minute. We wouldn't be able to do that without AI," Chung said.
Prologis started on 12 development projects worldwide during the second quarter, Chief Financial Officer Tim Arndt said during the company's most recent earnings call in July.
“While we remain very selective on new spec starts, we are maintaining our guidance of $2.5B to $3B for the year,” Arndt said.
