Don't tell the kiddies, but Santa's workshop isn't at the North Pole. It's here in Tracy, California, next to a line of rusting, graffiti-covered freight cars, in a building so long that you can't see the whole thing without turning your head to take in its full immensity. This is Amazon's latest-generation warehouse, a robot-powered marvel of efficiency that in some ways feels even more improbable than flying reindeer.

In early 2012, Amazon spent $775 million to acquire Kiva Systems, a Massachusetts-based startup that makes warehouse robots and software to automate the most mundane parts of filling online orders. For the past two years, the world's largest online retailer has kept mostly quiet about how it was using the Kiva robots in its own operations. But on Sunday, the day before the high point of the internet retail year, Amazon opened its doors to show off the droids that are taking its warehouses to the next level of consumer gratification.

The speed of commerce continues to accelerate, with Amazon setting the pace. The Tracy fulfillment center, about an hour east of San Francisco, opened last year as part of Amazon's strategy to locate more inventory closer to population hubs. Less distance means quicker delivery, including same-day. The Kiva robots are another part of the plan to sling more goods faster than ever. Speed doesn't come easy, but if Amazon can stay out in front, it can set the expectations that rivals will have no choice but to try to match.

Drew Kelly/WIRED

The Part That's Not Complicated

The first impression at any Amazon warehouse—the company calls them "fulfillment centers"—is the noise. Plastic bins rattling over rollers, conveyer belts brimming with packages, hissing machines slapping labels onto boxes—the warehouse is a machine in constant motion. Unlike older versions of its fulfillment centers, this one has zones of quiet at its heart. The robots live here.

Inside black chain-link cages on four floors, swarms of Kiva 'bots glide silently along an invisible grid. The squat orange automatons look like the smaller cousins of bumper cars, except they never collide. On their "backs," the 320-pound robots carry shelves standing several feet taller than their human attendants outside the cage and weighing up to 750 pounds . Each shelf is stuffed with bins on all four sides that hold inventory—coffee mugs, Crayola markers, GoPro lens protectors, USB cables, or just about any other of around 3.5 million different items stocked by Amazon at this warehouse, known by its call sign as OAK4.

>'Kiva’s doing the part that’s not that complicated. It’s just moving inventory around. The person is doing the complicated work.'

The moving shelves serve two main purposes. When inventory arrives at the fulfillment center, items have to wait somewhere before someone orders them. In the traditional process known as "stowing," a person walks the aisles with a cart and shelves the items. With the Kiva robots, Amazon workers wait at stations for the shelves to come to them, where they load up each one with inventory while the other robots queue politely behind. In the second part of the process, called "picking," orders come in, and pre-Kiva, pickers would walk the aisles to the bins storing the needed items. Now the shelves come to the pickers instead.

Amazon gains two major advantages by using robots instead of people to move the merchandise, says Dave Clark, Amazon's vice president of worldwide operations. Because aisles aren't needed between shelves to make room for human pickers, more items can be stored more closely together, he says, enabling a fulfillment center to hold more stuff. And the time saved by eliminating the need for humans to walk to where items are makes the movement of items in and out the door more efficient.

"Kiva's doing the part that's not that complicated. It's just moving inventory around," Clark says. "The person is doing the complicated work, which is reaching in, identifying the right product, making sure it's the right quality, making sure it's good enough to be a holiday gift for somebody."

Robots queue at an Amazon "stow station." Drew Kelly/WIRED

Moving Millions

Right now, Clark says OAK4 holds 21 million items total in its inventory. Once the fulfillment center is entirely built out with its full Kiva cohort, it will hold 26 million items total, representing 5 million different products. On a peak day, he says, OAK4 can ship out 700,000 items. By the time it's fully operational, he says, that number will rise as high as 1.5 million.

Aside from the Santa hats on workers packing orders into boxes, the atmosphere at OAK4 doesn't feel festive. Santa doesn't have time to slow down between Thanksgiving and Christmas. Of the 4,000 workers at this million-square-foot facility, Clark says 2,500 were hired to meet the holiday rush. Some of them will end up staying on as full-time workers after the holidays pass, he says.

>If Amazon can stay out in front, it can set the pace that rivals will have no choice but to try to match.

In the US, Amazon now has a workforce of 15,000 Kiva robots deployed across 10 of its 50 domestic fulfillment centers. Another fulfillment center in California also has a massive robot arm, the "Robo-Stow," capable of lifting entire pallets from one floor to another. The efficiency gains mean moving more orders more quickly, which among other effects will eventually push back the current noon cutoff time for same-day delivery orders to later in the afternoon.

But if robots move Amazon's merchandise faster while costing less overall, won't Amazon try to find ways to replace as many of those human workers as possible? Clark says that won't happen, because the rise in productivity will give Amazon the means to grow. And growth means Amazon will need to hire more people. The precise math of warehouse work does seem best suited to a robot brain in a mechanical body that never gets tired. But Amazon is a company that has always put growth ahead of any other priority, including profits.

"As you're getting efficient in one thing as it matures, you're investing in something new in a new place," Clark says. "I see that cycle continuing for a long time."