A Robot Revolution Hiding in the Supply Room

It's 2 a.m. in a Kroger supermarket in Louisville, Kentucky.

The lights are low.

The aisles have no customers.

Employees are restocking shelves.

And in the cleaning supplies section, a faded green machine about the size of a ride-on lawnmower glides silently across the tile floor.

It turns corners. Avoids crates. Scrubs with precision.

There's no human driver... and no remote control. It's just artificial intelligence ("AI"), doing a job most of us never stop to think about.

"It used to take my guys three hours," the night shift manager tells me. "Now this thing does it in 90 minutes. And it never calls in sick."

What I saw wasn't a flashy Silicon Valley robotics prototype or a Boston Dynamics demo. It was a Tennant T7AMR – a self-driving floor scrubber built by a 155-year-old company in Minnesota.

This company isn't chasing headlines. Instead, it's transforming one of the biggest, dirtiest, and most overlooked industries in America.

And it's the type of digital transformation story that Wall Street continues to miss...

A Public Robotics Company You Can Buy Today

You've probably never heard of Tennant (TNC). But you've almost certainly walked across floors it cleans – at airports, hospitals, warehouses, and grocery stores.

Tennant's business used to be simple: It made rugged floor scrubbers and industrial cleaning gear.

And while cleaning may not sound like the sexiest way to play AI, the global commercial cleaning industry generated $370 billion in annual revenue as of 2022. And U.S. businesses spent $90 billion per year on janitorial services.

Today, Tennant holds roughly a 14% market share in the global mechanized cleaning space. And quietly, almost invisibly, it has started adding AI to its machines.

After a long partnership, Tennant locked in an exclusive deal for this technology with Brain Corp (where I was vice president of product and marketing a while back). Tennant says its AI-enabled robots can move and detect objects more easily. So the machines work better and require less assistance from humans.

And here's the part Wall Street has missed: This tiny slice of Tennant's business – what it calls "autonomous mobile robots" – grew 30% year over year in the first quarter. This segment has shipped more than 10,000 units to date.

So, while investors chase moonshot AI ideas, Tennant is doing something much more practical, and potentially more profitable...

It's transforming the dull, dirty, and dangerous jobs of a boring business... and making it disruptive.

The Real Digital Transformation Story

Often, Wall Street looks for flashy products, huge capital raises, and fancy demos.

It's chasing AI companies that are starting from the ground up. The problem is, it takes a lot for those bets to pay off.

AI startups need to invent entirely new markets... overcome regulatory hurdles... and convince consumers to change deeply ingrained behaviors.

But the real transformation is happening inside established companies that already have three things most startups would kill for:

• Massive customer bases. Tennant has hundreds of thousands of machines deployed worldwide. So it has hundreds of thousands of upgrade opportunities.

• Deep domain expertise. Tennant understands commercial cleaning in ways that pure tech companies never will. When a hospital needs to disinfect an operating room or an airport wants to clean 2 million square feet overnight, they don't call Tesla – they call Tennant.

• Profitable base businesses. Unlike venture-backed startups that need to burn cash to find AI products that sell, traditional companies like Tennant can fund their transformation from existing cash flows. They're not betting the company on AI... They're using AI to turbocharge an already successful business model.

Take what you do well, add in AI, and suddenly you're not just a vendor – you're a strategic partner solving the problems that keep CEOs awake at night.

The Bottom Line

Tennant isn't just a cleaning company.

It's a 155-year-old industrial firm that's evolving into the Deere (DE) of autonomous robotics. And it's doing so right under Wall Street's nose.

For investors looking for the next great AI play without the hype, Tennant offers something rare:

• Downside protection from a steady industrial business...

• Upside from a booming AI automation segment...

• And the chance to own a robotics winner before it's recognized as one.

The robot revolution is already here. It's just happening in grocery aisles and hospital corridors – not on magazine covers.

As I always say: You're either early... or you're obsolete.

Good investing,

Josh Baylin