Symbotic said on Thursday it would buy Walmart's robotics business for $200 million in cash to help expand the retailer's automated supply chain, sending shares of the warehouse robotics firm up 20% in premarket trading.

The automation firm reached another agreement with Walmart to develop the retail giant's pickup and delivery centers using its artificial intelligence-enabled robotics platform.

A sign indicating the curbside pickup zone area is displayed at a Walmart Supercenter in Secaucus, New Jersey, U.S., October 18, 2024. REUTERS/Siddharth Cavale

As a result, Walmart would fund the development program and pay Symbotic $520 million, including $230 million at closing, for the new agreement that includes an initial order to cover hundreds of stores.

The robotics vendor, which has been helping Walmart automate its supply chain since 2017, said the acquisition was expected to close in the second quarter of fiscal 2025.

Retailers have been including AI-powered chatbots into their customer services, along with targeted promotions and loyalty programs, to entice shoppers who have increasingly turned to AI for better product recommendations.