Can anyone explain why does Waymo need to raise any money? Doesn't Alphabet have practically infinite pockets? If they are confident of Waymo, why would they want to share the profits with anyone else ever?
Even if Alphabet was reluctant to invest their own profits, can't they borrow cheaply too?
GoogleX projects can 'graduate' and become their own companies that issue their own stock.
Employees of Google that work on GoogleX projects that graduate no longer technically work for Google, but for the new company and they no longer receive Google shares, but new company shares (in this case Waymo, Loon is another example [0]).
This forces the company and employee incentives to be aligned since the value of the employee equity is tied to the success of the specific GoogleX project and not Google itself.
When a company graduates if a lot of employees don't want to stay on the project and choose to stay at Google, that itself might be a bad sign (though it could also just be employee risk preference).
I think companies graduate when they're less pure R&D and closer to marketability. If they can't survive on their own at that point it may be because there isn't a market, the timing isn't right, or any other reason that can cause a startup to fail.
This system prevents Google from pouring money into something that's never tested in an environment where it can actually fail. It puts moonshot projects in an environment where they're truly tested and don't just become places where money is spent without any ability to measure success.
It's my understanding that graduated companies have their own hiring methods and can make their own independent decisions in general. They would also need to raise their own money.
I don’t know, but even if that’s the case it would seem like it’s working as intended?
It’s better to know if something will not succeed and you can’t easily tell without testing in the market.
The incentive alignment with equity seems like the most critical piece and it has the bonus of rewarding employees for taking on the extra risk.
This lets you spin out big ideas without spending all of your money - a little like running internal VC (one big success could make up for all of the other failures).
I think at this level capital is not really the main constraint. It's attracting talent and creating a culture/environment where success is possible, even then that's just a necessary but insufficient prerequisite for success among all of the other non-capital reasons a startup might not succeed.
I don't think it was a GoogleX project, but Chronicle was spun out from Google as an independent company. It grew well, and seemed ready to succeed on its own.
Google then re-acquired it.
Speculation, but perhaps Google was concerned about it getting acquired by a competitor as it used a lot of core Google search technology. Or, perhaps Google knew that the acquisition cost would spiral upwards if they waited much longer. Or, perhaps it just proved out the hypothesis that the product was viable, so better to bring it back in-house.
But I would call it successful by conventional metrics: it found product-market fit, had good customer traction, and was acquired at a decent (though not crazy) valuation.
This is the scenario I expect, Waymo gets "spun out" and does its R&D on someone else's nickel and Google doesn't have to report the losses, then if it takes off, Google re-acquires it in a sweetheart deal and reaps all the goodness.
From my experience working there, this is the sort of concept they would be attracted to. Google gets a benefit from either scenario.
From the counter party part of this deal, the "investors" either lose their money, or they get a fixed amount of 'upside' when Google re-acquires.
Or maybe they know Waymo is there to burn through cash without doing anything useful (like any other “research” project at any place that has infinite stream of money from oil or, let’s say, ads) and expect it to be overtaken by competition and want to get out.
A common practice is to perform market research by expressing interest in acquiring competitors and then having them provide technical information to show acquisition worthiness. It’s all supposedly under NDA but the reality is that the big tech companies can easily sue you into oblivion and your lawsuit isn’t going anywhere. If you even try, welcome to the blacklist. Also the lawyers fees on your side are enough to put you out of business.
They are fishing for understanding of the market and sometimes general approaches or parameters of possibility. You are providing free insight. It’s the same when you pitch a VC. You just give them more and more free insight. Hopefully they provide value in return.
If this is merely a scheme for Google to sweep the losses under the carpet, what's in it for the investors who'll be left holding the bag? And mind you, in order for the losses to go away, the value of the company at the time it's spun out needs to exceed the billions of dollars already invested in it over the span of 12 years. (Including $120m paid out in bonuses to Anthony Levandowski alone.)
I wasn't trying to say it is "merely" a scheme. Its sort of like shorting some stock and at the same time buying a call option for twice that many shares above the price that you shorted it for.
The short part gives you some cash now and if the stock drops even further, you can cover the short and keep the profit. But if the stock goes up, just when there is a margin call you've got an "in the money" call option to cover it. So if it is shooting up you exercise the call, cover the short with half the shares, and profit when the other half keep shooting up.
Anyone can nominally do this on any stock, but there are tax advantages to the company that does it with one of their own subsidiaries.
50.1% doesn't magically absolve you of the responsibility to maximize shareholder value. They could vote to sell to Alphabet for $1 - it would result in a massive lawsuit.
Yes, people can and will sue for any reason. But in this case this is how the suit would likely go ...
plaintiff: "Your honor these share holders are suing the company for violating its fiduciary duty."
company; "Your honor, we know that some share holders may not always agree with the majority, but we made sure that over 50% of the share holders were on board with every decision we've made. We move to dismiss."
Judge: "You have documented that the majority agreed?"
company: "Yes your honor"
Judge: "And every shareholder has access to the bylaws of the company which state in clear and unequivocal terms that all decisions will be decided by a simple majority vote?"
One is VirusTotal, which is super important to the security community but I don't think generates enough revenue to live on its own.
The other is a strange "Splunk Lite" offering that as far as I could tell the main selling point was it was way cheaper because Google gave them free/discounted storage. The search was terrible. It didn't highlight important things or hide the mundane. When I saw a demo it didn't even support IPv6 yet.
But I guess every moonshot factory has to have its Challenger disaster to learn a few lessons.
sounds like a spin-out/spin-in model. you do these primarily to create special compensation packages.
the inclusion of a non-revocable license to core technology is a common part of such structures because it gives the people who take the risk some proof against management changes that otherwise sink such deals.
It's my understanding is that Google X is a marketing / PR platform for Google. Google X doesn't ever need to actually produce anything or create any real-world value because their value is in the PR they generate for Google - keeping them positioned through press as a technology company vs. the largest advertising company in the world. Many of the Google X projects are acquisitions/acquihires purchased to continue the narrative. It's why they never ship products and can't get anything out the door. If this works - it'll be one of the first after billions invested. They've done an excellent job I would say.
It makes sense from a focus point of view. Rather than Google/Alphabet pissing away their profits on ventures outside their core competence, spin them off and leave them for investors and managers that want to focus on self driving cars or whatever. It's hard enough to do one thing well.
Alphabet holding structure first and foremost is there to increase stock price. It’s specifically structured to separate and downsize risks. One of the investor’s concern is uncontrollable pouring of money into moonshots. Making them separate companies creates some transparency and illusion of accountability.
>> Making them separate companies creates some transparency and illusion of accountability.
I would not be so dismissive of it -- there are good reasons to have separate companies. You can offload some risk by getting co-venture (as in Waymo's case.) More importantly, you can have other critical partners be co-invested with skin in the game. In the case of Waymo, if I were trying to raise funding, I might get money from P&C Insurance companies -- it could help align great future partnerships that make 1+1=3.
You can get more info about this by reading up on GoogleX, but more importantly the articles that came out when Alphabet was formed. Those graduated companies would need a parent company, and that company was Alphabet. It was done to separate these graduated companies from Google's name (and accounting depts).
Alphabet wants Waymo to become a company that can make it on its own steam, rather than be dependent on the Google revenue stream. For the first several years of Waymo's life they did exactly what your describing, but now they're at a point where they want to "push it out of the nest" a little bit. Sharing the profits is probably not much of a concern, if Waymo doesn't manage to become self sustaining there won't be any profits to split, so it makes sense to optimize for that.
But it would have everything to do with Waymo. Clearly this is something they’re thinking about, and one hopes they learned a lot from Uber’s accident in AZ.
I think if anything, it causes the bar to be super duper high to fully launch, which is why I’m very pessimistic on Level 5 driving happening anytime in the near future. AGI is not solved, not even remotely, and if death is the consequence, Waymo will probably dissolve before launch.
Are humans AGI? They kill 35k on US roads alone each year. If Level 5 means 0 deaths per year, then it will never happen until the singularity. It is quite possible America's safety first attidue will let 35k people die a year because automatic cars would kill hundreds per year, but I hope not.
I wonder if all this AI to build self driving cars should have gone into AI that simply saves lives a lot more easily:
- detect if the driver is insane, drunk, swerving (tired?), stolen.
- detect baby in the backseat parked, and temp rising?
If all the AI did was decide you're unfit to drive, that it take over for a few minutes to get to the next stop and pull over and call the cops on you, we might save more lives by that alone.
Automatic crash avoidance is already a thing that's steadily rolling out to more cars, and improving over time.
For stopping people from driving, you'd have to solve the social issues there first somehow. "Our car stops you from driving if it thinks you're incompetent" isn't something that sells more cars. Maybe the government could mandate it, and that's the government's responsibility.
> "Our car stops you from driving if it thinks you're incompetent" isn't something that sells more cars.
I could see something like that as part of a “supervised driver” safety feature. Like maybe you enable it when your kids use the car or if you rent the car out to strangers.
The AI that you talk about should be used in traffic lights. They should affix cameras to every single traffic light and have AI figure out the traffic flows. Then they can make traffic much more efficient throughout an entire city. It should be able to track a car through its entire journey through license plate recognition, and then adjust traffic throughout the entire city so that it's the most efficient for the amount of traffic.
So basically a super high tech car breathalyzer that uses some black box algorithm to decide if I'm drunk and call the police on me? The self driving car seems a little bit cooler.
Why not just install the existing breathalyzers in every car right now?
Yes but who am I going to go after if another car hits me if its autonomous? The manufacturer which is a 10 year plus lawsuit taking up a large portion of my life. I definitely think keeping the responsibility to the person driving the vehicle is the only reason the death toll is somewhat acceptable to society.
This seems backwards to me. If you get hit by Google, you’ll wake up in a hospital bed full of flowers from ambulance-chasing lawyers who are salivating over the chance to represent you so they can get in on that sweet settlement money.
Hit by a human, decent chance they flee and if you track them down, it’ll probably be some uninsured drunk with a negative net worth.
For reference, 35k deaths in the USA is about 1 death every 85 million miles driven. In comparison, Waymo has supposedly driven about 20 million miles. It's good that Waymo has had no deaths so far, because otherwise it would likely be far less safe than human drivers if there were any.
I downvoted because it's the sort of flippant comment that comes up in every self-driving car discussion, and
there's lots more compelling reasons that google might want to spin off waymo that a fear of bad PR when a car kills somebody. (mostly because that's how the Google X projects have always worked)
Of course a waymo car will kill somebody at some point. Everybody knows it's going to happen, and there's no way google/alphabet hasn't essentially priced in that risk. If they were afraid of killing people, they wouldn't have gotten into cars in the first place.
External investments can prove that Waymo was able to convince its own value outside of Alphabet, which might be a significant signal for future investors.
Alphabet can (and will likely) invest $xB more money for initial business ramp-up but if you want to create the next Google probably money from their own pocket might not be enough. This is particularly important as they need to heavily invest into physical assets with very high upfront costs.
FYI, Uber has 10 millions of drivers across the world and if you want to match that number, you're gonna need $100B even with super conservative assumption of $10k per car (and the actual cost will likely be much higher). Doing something like this by Alphabet alone is extremely risky given that the technology is still in a very young stage.
A company has to be able to operate on its own. Look at BRK; they don't fund every last bit of debt for all of their holdings. They will pull profits from company A even if A needs money to e.g. invest in operations if they can get credit at a decent rate. They may put that money in company B which has more growth potential and is not in as good a position to take on debt to do so.
From the last time this story was posted I recall that Alphabet was only offering Waymo investment opportunities to automakers. This would be an important aspect of fostering strategic partnerships, since Waymo is probably not planning to get deep into the car manufacturing business.
That’s a good point. But maybe they don’t have 100% confidence so they want to share the risk.
Or maybe alphabet doesn’t see the self driving VEHICLE as their product. Maybe they see the consumer data as the product and want someone else to pay for the effort to collect it.
My take is that there are two interests in self driving cars for Google Proper (i.e. Search, Maps, Youtube, News, Ads).
* Free version of Uber/Lyft based on a Google ad/maps referral as described by this patent [1]
* Free up peoples commute times so there eyeballs are free to use Google more (watch Youtube, use Google Search, read Google News). Perhaps even access free in-Waymo wifi that only allows Google domain access.
They have monopolies in these two areas and therefore neither requires 100% ownership in Waymo.
> Can anyone explain why does Waymo need to raise any money? Doesn't Alphabet have practically infinite pockets? If they are confident of Waymo, why would they want to share the profits with anyone else ever?
It's not just about getting money, it's also about getting money from the right people. Investors with the pull/clout/insight/etc they need. Investors who know people or who know people who know people. Perhaps people who have political connections or regulatory access. People with insight in the automotive industry. People with ties to media for favorable coverage. It's about getting money from people in position to help them. It's like a movie production that bring in producers who has connections to local governments that can expedite the process of shutting down a bridge or highway to film on for a day.
Alphabet has "limitless" amount of money but there is also a "limitless" amount of money outside of alphabet wanting to buy into waymo. So for waymo, it's really not about getting money but getting the right type of investors. It's a two way street. Investors want to buy into waymo and waymo wants to buy into investors.
I think also Google share holder probably wont stomach unlimited investment in this. It allows Google stock growth to not be hampered by this investment
Investors could start getting angry if they feel that Google is blowing large amounts of cash on endeavors that continue to fail. By doing it this way they get a major stake in the potential success of their spin-offs, but they are able to continue delivering profits rather than sinking cash in one black-hole big idea after another. It's probably a matter of walking the line between short-term value of the already successful business versus long-term but riskier value of the potential moonshots.
All of the reasons other commentors gave, and also to show it has value. Think of it like getting a credit card while you can still technically get money from your parents (weak analogy).
If you can get money from someone else it shows that it has value in the marketplace generally.
If I were one of those new investors, I'd ask the same question. Alphabet has been involved in Waymo for 12 years. Why does Alphabet feel that more cash is a better investment than more shares in Waymo? What does Alphabet know that I don't?
Fossuser gave the best answer thus far to your question. [0]
A few confounders I haven't seen though:
1) Waymo is its own entity, but its brand is linked to Google/Alphabet. A reader of this article will be clear on that by the time they have gotten through the sub-headline.
Any success or catastrophic failure of Waymo/self-driving will have Google spoken of in the same breath as Waymo.
2) Capital Allocation & Diversification
- Google had $119 Billion of cash on hand at the end of FY2019 earning no return. More than any other company.
- Alphabet is not Berkshire Hathaway waiting in the wings to deploy its capital in a downturn or buy up unrelated businesses.
- Diversification is a fine strategy, but when you have this much capital to allocate—and ostensibly Alphabet has this much because they don't know what to do with it—not fully funding Waymo itself doesn't make sense.
3) The Waymo blog post about this that Rutledge linked below gives a possible alternative [1]
> “Today, we're expanding that team, adding financial investors and important strategic partners who bring decades of experience investing in and supporting successful technology companies building transformative products. With this injection of capital and business acumen, alongside Alphabet, we’ll deepen our investment in our people, our technology, and our operations, all in support of the deployment of the Waymo Driver around the world.”
Building technology is hard, but building out a car company that can produce vehicles on any scale is also hard. Tesla and Elon now know this.
So maybe by opening up to outside investment they allow strategic partners to share in the risk and outsized reward of success.
Curiously though, only one of the six outside investors listed seem to be "strategic." That would be Magna International, "a leading global automotive supplier."
The other investors are:
- AutoNation: a used/new car buying/selling website
- Andreessen Horowitz: VC firm
- Canada Pension Plan Investment Board
- Silver Lake: private equity
- Mubadala Investment Company: United Arab Emirates sovereign wealth fund
From the outside looking in, I have further questions as to how those are "strategic" investments that could help develop and/or bring Waymo cars to market.
tl;dr Alphabet/Google has so much capital it needs to deploy not using it to fully fund Waymo is curious. Waymo is not a distinct brand from Google/Alphabet. It's not readily apparent how six of the seven outside investors chosen for the "strategic" investment add value beyond capital.
Thanks - I'd argue it's less about brand separation and more about actually testing viability and forcing a culture that considers survival when making decisions.
The ability to raise money is itself a test - if you can't get third parties to invest then that's not a great sign. Google's judgement may be impaired by being so close to it.
They could easily self-fund, but then they wouldn't get that signal. Forcing a company to survive out of the nest will influence the decisions the stakeholders make, they can't relax knowing that Google will just fund things no matter what, they have to be focused on shipping something people want.
At least that would be my guess.
It's a clever way to try and prevent the lethargic energy that comes from being a big company along with the inability for large companies to innovate outside their narrow domain (often even within it).
That all makes a lot of sense especially in light of the lack of urgency to bring things to market that has been reported about Google X throughout its history.
- Mubadala Investment Company: United Arab Emirates sovereign wealth fund
Couldn't these also be considered strategic in the regional/political/regulatory sense? Access to people with strong connections having skin in the game.
Very simple: Google shareholders don't want to be tied up to that extent in self-driving cars.
By keeping Waymo separate, shareholders can make their own choice as to how much they want to invest in search/advertising vs. self-driving cars. They're drastically different risk/reward profiles.
Obviously this isn't something a company usually does, but that's because either a division is small, or it has significant links to the rest of the company, or there's a clear joint strategy.
But Waymo is expected to be huge, and there's really essentially zero link to the ads/search/cloud/media that is Google's bread and butter.
Google Video was an actual product, competing with Youtube. When they decided to acquire the much more successful Youtube, its brand already had a lot of value and recognition, so it survived.
Yet they applied the google name to nest? Android remains without a google moniker (other issues there).
Point being that google has quite a few inconsistencies in their naming (which is a thing in itself) and their not applying Google brand to Waymo at this point is any indication.
Blogger was also an acquisition (from the future founder of Twitter), and it already had a strong brand.
Whereas in 2011 there was a lot of marketing tying self-driving cars <=> Google.
There could be other reasons for the separate brand, like managing bad PR from a crash, but I would also classify that under "don't have confidence".
In contrast Tesla seems to be staking their brand on self-driving. I feel like this could backfire in the next 5-10 years, but Elon will probably make some other advance/launch to distract from that. Self-driving has already fallen behind Tesla's claims, but he can keep the media busy enough with other stories.
It last several years beyond the acquisition of YouTube. In college, I used to be something of a history buff and remember watching and enjoying many old documentaries on WW2 and Cold War stuff on Google Videos. According to the Wiki article, they only turned off uploading to Google Videos in 2011, almost 6 years after acquiring YT.
Google Video is a thing, it was Google's competitor to YouTube before Google bought YouTube. (And YouTube was already called YouTube before Google bought it.)
Even if you thought Waymo technology was amazing and would be a huge success, there is a non-trivial risk that a self-driving car could kill people and turn into a PR nightmare. Thus it's totally reasonable that Google would want to insulate themselves against that risk considering that they own one of the world's most valuable brands in their search business. Also, it might make sense to have a real privacy wall between Google and a potential fleet of millions of cars outfitted with multiple cameras and sensors. The only way to do that effectively is to have a separate company do it.
People are going to die in Waymo cars, and sometimes we'll wonder if the accident was avoidable and if the car made the wrong choice leading to someone's death.
It'll look bad on the brand when the news is reporting how, "Google self-driving car kills family en route to Disneyland".
I'm not saying self-driving cars are dangerous, but it's just the numbers. People will die and self-driving car deaths will be shocking news and make headlines for a long time. I wouldn't want my brand name anywhere near them.
Sure, just look at Rolls Royce. A related company with that brand name makes jet engines, which of course are thus involved in tragic and headline-making air accidents.
As a result Rolls Royce cars are... huh, no, people actually nod right along, that makes sense, Rolls Royce jet engines, I would want a reliable, high quality jet engine and that's what I associate with this car brand. Most people have no idea it isn't even the same company.
News outlets will connect Google to such deaths regardless. "Google car kills two" the headline will say, and Google's PR person will know better than to insist "Actually it should say Waymo not Google".
It looks bad if it becomes a trend. "Man dies in car crash" isn't going to destroy your brand. Ask every single car company in the world. Even Volvo, whose brand is specifically all about safety. It requires a trend, which is what hurt Boeing recently, bad news after bad news without respite, that'll do it. But there's no reason to think Waymo will ship something dangerous enough to cause such a trend.
There's a difference between someone crashing their own Volvo, and someone sitting in the backseat of a Waymo that misinterprets the lane markers and crashes into a barrier. One is not news, one is front page news.
I guarantee the first Waymo death is going to be publicized everywhere. It doesn't need to be a trend, and as I said, it doesn't mean the cars are more dangerous than human drivers. However, it's going to be news. There are going to be all sorts of moral debates when an algorithm decides to drive over a child instead of turning into an oncoming car. People will want answers. How does Waymo rank the value of different lives? I imagine it'll be news for the next decade until there are thousands of deaths and it becomes normal.
It's an industry that's going to be full of "firsts" and that's going to be the news. Waymo drives over dog while auto-piloting to a parking lot. Waymo mistakes grocery cart for stroller and swerves into elderly man. Waymo kills cyclist when poor weather disrupts censors. It doesn't matter if they ship something safe. Get enough cars on the road and these things will happen and people will be talking about it.
> There are going to be all sorts of moral debates when an algorithm decides to drive over a child instead of turning into an oncoming car.
No. That's a trolley problem. It's an interesting intellectual exercise, you can maybe win a debate team trophy for your rousing defence of one choice or the other - but these moral decisions aren't actually what drivers do whether they're humans or a powerful AI.
People keep acting as though this is an unprecedented situation and invoking weird moral beliefs about thinking machines, when it's actually utterly routine. Let's try another exercise:
How many headlines have you read about a specific brand of elevator decapitating a child? Is it none? Do you see anybody pushing for the big elevator manufacturers to have to reveal how they "rank the value of different lives"? No?
That's not because nobody dies this way, it's because we say oh that's just a machine obviously if things go wrong you can get seriously injured and the machine doesn't know if you're a nun or a basketball champion it isn't trying to kill/ not kill anybody in particular it's just a machine.
Humans are often tempted to try "escape manoeuvres" and these almost invariably go wrong, we don't teach machines to try such manoeuvres because the machines are trained based on real performance data not someone's model of themselves as an immortal superhero.
One of the first Waymo crashes was somebody trying an escape manoeuvre. They found themselves in a potential collision so rather than the correct thing (brake to reduce speed, hit the thing you're colliding with because it's too close) they tried an abrupt swerve, lost control of course, crossed a median and smashed into the unrelated oncoming Waymo car at high speed writing off both vehicles. Humans do stuff like that, you can try training them not to but they won't listen. But the machines do not have that problem, so less "Should I kill the nun, the pregnant woman or the Olympic champion?" and more "Despite maximum braking effort a collision has become inevitable. Preparing safety systems for impact".
Meanwhile, Tesla continues to iterate on a production fleet with a (admit idly rough) new capability rolled out to allow autopilot to obey stop lights and stop signs.
If I were a investor that invested in individual stocks (which I am not), my money would be on Tesla over the long run here.
Waymo did considering the iterative method and decided against it intentionally. Putting aside the obvious danger of incrementally getting to L4 (the inbetween state where the system feels safe enough for users to not pay attention, but actually isn't), it's actually not obvious that there is an obvious smooth transition from L2 to L4.
Yes, Tesla may be getting more data in the field, but Waymo is still much further ahead with actual fully self-driving car without anyone at the wheel (within a small region + good weather). Also worth pointing out that the quality of the data also matters, not only the quantity.
> "Waymo is still much further ahead with actual fully self-driving car "
Tesla is ahead where it counts, sales. it feels like waymo was already 'successful' in small regions with good weather not requiring complex thought situations in 2018. meanwhile tesla is improving designs, expanding capabilities, and selling cars.
I'm not a tesla fan boy, but I definitely prefer their approach in terms of iteration (not sure if I agree with the tech choices).
Where it counts for what? Tesla has demonstrated it can sell non-autonomous cars, Waymo has not, but the GP's point is it's not clear what bearing that has on making an autonomous car work.
Because you have to sell them, and they actually have a product in the market. if you don't intuitively understand that, there is nothing more to say because you just don't understand it to make an informed thought on it.
I'll give you a hint, the technology doesn't define the product.
Product here is "L4 self-driving technology", not "car" as you seem to be implying. Yes, Tesla is shipping cars, but they are nowhere close to L4 self-driving (aka no one at the steering wheel).
> they actually have a product in the market
No they don't. They have a car on the market, and an L2 driving assistant. As I was implying above and again repeated by the post you replied to, there's no indication that you can transition from L2 to L4 in a gradual manner, so "L2 product in the market" means absolutely nothing.
Here's an analogy for you, I'm saying that Google is ahead of Intel in making a Quantum chip, and you tell me that Intel is right now shipping millions of classical chips, therefore they are closer to making quantum chips. My argument is that the jump from L2 to L4 is similar to classical vs quantum chips, and shipping millions of L2 cars does not mean you're any closer to L4 technology.
I think this was a strong argument when Tesla was the rough highway only version it was two years ago. Now it’s dramatically better and continuing to accelerate.
Yet L4 is still nowhere in sight. What Tesla has now, Waymo had a demo for almost a decade ago. Either Waymo has been doing literally nothing for the past decade, or there's something more subtle and far more difficult about getting to L4.
Or just like a ton of other companies like Magic Leap, they went for a moonshot and are discovering that it would have been better to iterate instead.
I suspect we will see a replay here of the ULA versus SpaceX history of the last ten years, and at the end, Google is going to look up and wonder "what happened" while Tesla continues to dominate the actual market.
It's interesting to me that you label Google's approach as a moonshot, because to me that better describes Tesla's approach. They're skipping the "crutch" of Lidar and geofencing and betting the farm on a software breakthrough. If it were anyone but Tesla, it would be a joke.
My expectation is that Tesla gets better and better but doesn't move beyond a driver assistance package for a very long time. None of the hardware sold today ends up being FSD.
Waymo remains limited in scope by its business model. It rolls out driverless taxis to more and more cities, but you can't buy a Waymo FSD car, and it remains geofenced for a decade or more.
Which company wins the race to being able to buy a car without a steering wheel that will take you anywhere? I could see Tesla winning that.
But Waymo is in a position to capture significant economic benefit by being an Uber competitor and providing logistics in the meantime, if they can scale up quickly enough.
Regardless of how it goes, it's going to be fun to watch.
> Or just like a ton of other companies like Magic Leap, they went for a moonshot and are discovering that it would have been better to iterate instead.
Waymo started with the iterative approach, and threw it out of the window after they observed what Tesla is observing now: Humans suck at monitoring. Their testers started doing all kinds of crap while the car they were supposed to be supervising was driving, including texting, make-up and taking a nap.
Waymo identified the risks, and had the luxury to take a step back, and re-aim the moonshot. Tesla made the same discovery, but can't (or at least didn't) go back and say "we need to re-evaluate our approach to FSD" - and instead keep trying to get people to stay attentive at the monotone task of monitoring the vehicle, while continue to keep the blame on the human when they crash and die.
Now Waymo is in the position of being not only the current leader in self-driving tech (having cars without drivers on the road), but also having the perception of being the responsible player in the field, putting safety over profit&sales. Having the first cars without drivers on the road allows them to help inform legislation in that space, while Tesla is still struggling to convince their test drivers (=customers) to pay attention and not crash.
Tesla autopilot is a joke compared to what Waymo intends to do. For Tesla, autopilot is just an add-on, a cherry on the cake that is a good-looking, hi-tech electric car. For Waymo, full self driving has been the one and only focus. On the surface, one is tempted to compare the two, but from an investment standpoint, I would not compare them directly. Tesla competes with car companies. Waymo competes with driverless car tech companies. Tesla also has some driverless car tech, but I would not invest in Tesla for that. Waymo is still likely the leader in driverless car tech, and that is a winner-takes-all market.
Tesla has Full Self Driving as a clear objective and feature though, autopilot is just their way of releasing the useful features they acquire along the way to FSD. Tesla's difference in its approach (which I think most people tend to miss) is that it aims to be a robust general solution to L5, not a "hard coded", expensive, brittle, geofenced solution, which are basically what all the other L4 startups are aiming for.
As famously Levandovski (the guy behind Waymo, Uber and Otto) and others have accepted that Lidar and HD maps are the wrong approach.
https://medium.com/pronto-ai/pronto-means-ready-e885bc8ec9e9
It just is not a sufficiently general and economic solution to be scalable across time and space. It doesn't matter if Waymo's only focus has been FSD (which it completely hasn't) if they have a wrong approach they won't achieve it.
Obeying stop lights and stop signs is a very very long way from fully autonomous cars. "Deploying a production fleet" is a problem that car companies have solved for a century+ so if the finish line is "Deploying a production fleet of autonomous cars," the autonomous part is the hardest part of the equation, I don't see Tesla making it there first.
I agree. I think one key element Tesla is lacking (currently) is handling pedestrians. No Tesla driving demo I could see included any humans outside their cars.
But tesla is the only one selling cars you can get today i guess. Waymo's ride share is still very very limited in availability and likely won't expand anytime soon
Every accident, i hear them talk about how autopilot is not driverless, as fully self driving does not imply driverless. As it is a driver assistance system that requires human oversight and control.
On the other hand, there are constant claims of Tesla being the only one with driverless cars on the road.
Not sure I agree here. The Tesla technology does quite well with a camera based sensor suite and a moderately priced custom silicon. It is rapidly getting better and they are logging an order of magnitude more miles than Waymo which is still using expensive LiDar and relying extensively on HD Maps.
It’s way too early to know which approach will be the “winner”.
With the sky-high valuation we see in Tesla, the market already seems to be pricing in something along these lines. Unless you mean that Tesla, even at the current level, is still under-priced.
I ride in a M3 daily. If by "obey" you mean stop at every stop sign and light regardless of color and wait for a user interaction sure. Still no automatic turns either.
haven't waymo cars been able to obey stop lights and stop signs for years now?
Personally, if i were invested in these companies my money would be on the ones developing autonomous car tech over the ones who aren't. Tesla and Waymo can both be leaders here.
As far as actual real-life autonomous driving goes, Waymo is by FAR AND AWAY ahead of everyone else. Tesla's "self-driving" really isn't that good, relatively speaking.
I've heard that a lot, and it never made any sense to me. What are they gathering exactly, video and radar feed? Nobody does end-to-end ML, so this data needs labeling. This is the costly part as it requires manual labour. And it doesn't scale with the deployment size at all.
1. Example of gathering data that needs further labeling
To implement neural network (NN) to recognize stop signs they program the cars to recognize things that look like stop signs and deploy that to the fleet of over 600 thousand cars on the road. The cars send those "might or might not be a stop sign" images back to tesla and they get manually labelled and added to a training set. They gather enough images and the "recognize stop signs" feature is done. Apply the same logic to other recognition tasks: recognize cars, pedestrians, animals, speed signs, traffic lights etc.
Yes, labeling is expensive but everyone else (including Waymo) has the same cost.
But Waymo has even bigger cost of driving around to collect those images.
Tesla makes gross profit on every car they sell and they got 600 thousand people driving for them for free. Waymo has 600 cars, each of them reportedly costing over $200k and they have to pay drivers at least minimum wage for each hour of driving.
That's why Google is reportedly is spending $1 billion a year on Waymo and why they need $3 billion of additional investment to keep going.
2. Example of gathering data that doesn't need labeling
Consider implementing NN to recognize cut in i.e. other cars entering your lane in front of you.
They deploy a first version trained on small sample, running in shadow mode i.e. it makes predictions for cut ins but doesn't act on it.
When it makes wrong prediction, it sends the clip of the cut in back to Tesla. This doesn't need manual labeling. They know whether the car did cut in or not so they can rewind time and automatically label the past car action.
And ignores the fact that google already has images of millions of miles of road across multiple years / weather conditions AND the worlds largest real-time automobile movement database for that little app the call “maps”.
Does anyone else think that the massive decrease in driving (due to lockdowns) is a game-changer for the outlook on autonomous vehicles? Suppose we can embrace a society with fewer drivers, isn't that better for autonomous vehicles by most metrics?
I expect we will see gradual conversion of roads to be more amenable to autonomous driving - barriers for pedestrians, special markings, etc - and autonomous zones will become more and more commonplace.
On the other hand I think with the collapse of the economy and skyrocketing unemployment, the price for a human driver may plummet. Remains to be seen if the increased demand in deliveries is enough to offset the voids left in the rest of the economy.
I don’t see it happening for the US that way. The increased cost of infrastructure would probably be too much? Unless the US figures out how to lower construction/maintenance costs reliably, I don’t see those features being added. It feels like we’re already pretty low on features... It takes years for faded lines to be repainted on the road.
Long term Autonomous cars are likely to need less markings or barriers than normal drivers not more. Why have road signs when updating a database somewhere is cheaper? We are at the stage of people in the 1960’s talking about long term computer trends.
I made one for myself a while ago: https://github.com/ImedAdel/arkiv, it just tries to look for an archived version or sends you to a page to build to archive the website.
I dont understand Waymo and what they are doing. What is their path to making money on this?
They are not building their own cars, haven't partnered with any automakers either. In fact they discussed with a bunch of them and couldn't convince any company to partner with them. Most of the automakers already are investing heavily in their own autonomous tech stack. Unless they blow everyone out of the water with their technology I don't see them selling their stuff to automakers.
The only path then is an Uber competitor. That means they have to acquire a fleet custom made for their solution. That is a huge investment a large undertaking, not sure Waymo has it in them to do it. This is not Google wave to abandon so I am sure they will not do so, however I will not be surprised if people grow frustrated by the lack of clarity.
I get your frustration -- but at the same time, i'm darn glad they are doing "stuff" whatever it might be. Self driving cars will change the world in so many ways. Traditional industry was too close-minded to tackle the challenge and now we have non-traditional players (Google, Uber) leading the charge -- this has spurred traditional players to jump in. It also creates a statistical-ish way to spread strategy bets in approach. Hopefully some combination of the many approaches being used wins -- then we all win.
What do you mean by “what is their path to making money on this?” Original founders cashed out very well (remember Lewandowski’s 120 millions?). I’m sure current management will manage just fine in the private round or some other “stock buyback program”.
Can anyone explain the business model of a self-driving car company? We already have this service, except it’s powered by humans. Humans who own the cars, store the cars, clean them, and take care of all the maintenance.
A self-driving car company will have to own a huge depreciating asset, and they’ll still need staff to clean & take care of the cars in addition to an enormously expensive engineering team and/or licensing payments.
What business model are these companies trying to fulfill? It seems like they are trying to solve a problem that doesn’t exist.
Except self driving trucks can drive 24/7 and never take a break. You’ve seen those truck stops where there’s 30-40 trucks sitting idle while their drivers are sleeping and on mandated breaks? Wasteful.
If all cars are self driving we can eliminate red lights and traffic signals because of machine coordination.
Better utilisation of cars will lead to a 5x to 10x decrease in traffic, and route planning algorithms will optimise pickups and simultaneous package delivery.
Your car can go and ferry people around rather than sit idle taking up parking spaces while you’re at work (copy paste this for 200,000 workers in the city) and make you money
The car can go fuel and charge itself and drive itself to servicing and cleaning.
( Working in the field. This is obviously not my employer’s opinion. ) Don’t think about your own personal car. Don’t even think about a taxi fleet. Think about all the large company who has to truck goods to their locations, like all store chains for example. They have to maintain a huge fleet of vehicles and a small army of drivers. They already have a maintenance center where a different small army is fixing and cleaning the trucks. If you have a working self driving system you can replace the army of drivers with it as long as the cost of the self driving system is lower than the wages you pay the drivers. This of course puts a cost limit on the viability of the self driving system. If you need 10 Phds per car to keep them rolling then you lost and nobody is going to use your system. On the other hand self driving companies bet is that through smartness they can make it so that they only have to employ a handfull of people per thousands of trucks driven. If that bet works out then the system is financially viable. If it is viable the self driving company can capture a portion of the difference between the drivers wage and the barebones cost of running the system in perpetuity.
But why do they have to make profit? Original founders already cashed out, current management and top employees will most likely cash out in the private round.
I'm not sure I would be so pleased as an employee or share/optionholder in Waymo about the fundraising. In fact, people forget that fundraising isn't something really to be overly proud of. It's a loan, whether it's phrased that way, or as an equity stake.
It was all fine when they got free money from Google to power their experiments (cars, people, time). Now they're borrowing from their own value to pay investors for the loan.
I'd want to see some belt tightening from what is sure to be an overly large engineering team and lots of support staff, if there were ever to be the promise of becoming profitable (and to eventually pay for these loans from investors).
It's an inaccurate comparison. The problems are very different. Magic Leap is trying to create a viable product for a market that doesn't exist. What they are actually going to ship and how it's going to be useful is still up in the air.
Autonomous is going to be incredibly valuable and it's a hard problem that we'll have to keep hacking away at for a long time. Waymo has made more advancements than any other company. There is a big pack of companies all trying to get a piece of this pie and none of them may succeed in the short term, but Waymo looks to have the best shot.
The Oculus Quest has proven to be incredibly successful. Magic Leap has had more than enough time to develop something comparable. Instead billions of dollars have been poured in only to result in fancy tech demos. Waymo is 100% at the same stage right now, and if nothing happens, they will definitely be the Magic Leap of autonomous driving.
But beyond that I am sure there is a market for self driving cars. Just don't know if / when they'll get to the point that they can sell it, but I'm a hell of a lot more sure about Waymo's product demand than I am Magic Leap's in terms of "Does anyone want this product / could you actually sell it?"
Waymo is there to help me get places easier. I like that. I'm not at all sure what Magic Leap was offering.
They primarily make software right? 3Bn seems like a lot of cash for a software company to need. That’s 2m dollars per employee. What am I missing here? Am I just old and out of touch?
They also design hardware, and they run a fleet of 600 vehicles in Arizona by last count. They're also ramping up a new fleet of up to 20,000 no doubt very expensive vehicles.
2m is only if they keep the current headcount, which may not be feasible if they want to test in more locations, or negotiate the upcoming self-driving legislation in multiple countries. Plus who knows how long it'll take before these cars are viable. This is still very much a research project.
One oft-repeated line about driverless cars was that they would improve the world by reducing car accidents, and possibly helping with congestion and parking problems.
The pandemic has proven that these goals and many more can be accomplished without any complicated, speculative AI technology, simply by taking full advantage of telecommuting and delivery. Obviously there is no profit to be made so it would make no sense for investors to do so, but I wonder what $3B could accomplish if it were put to the purpose of reducing the need to travel, rather than finding new ways to burn gasoline.
I guarantee you there's plenty of profit to be made in delivery and even telecommuting. Hell, Amazon alone is investing more than $3B extra in the next quarter!
I'm not a car owner but I wouldn't buy a car from Google or a car that is connected to the internet / saves data into logs that can be read in a garage.
I wouldn't buy a car from Google because of this [1]. Even if Google promised not to collect data I wouldn't believe them.
Maybe I haven't been following Waymo too closely... but are they even planning on selling cars? I thought the end goal was to build a fleet of self-driving cars to have a lower cost Uber/Lyft replacement. You wouldn't own the car, but merely a subscription to their self-driving fleet.
Doesn't look like it. Waymo seems content to do taxi and delivery, though my guess is Google took such a large stake in Uber and Lyft in order to license the tech there. Or integrate Waymo fleets with their apps.
Despite the glut of subprime car loans, the newer generations are buying less cars, and Waymo is probably not going to try to sell vehicles.
Frankly, nothing you said amounts to anything more than FUD.
You're clearly extremely paranoid and not a car owner and also Waymo does not sell cars to consumers. They aren't trying to sell someone like you anything.
No one cares that you don't trust Google or that you wouldn't buy a car that's not for sale.
This is a pretty aggressive response for what is a reasonable observation. There’s a growing sense by broad swaths of the population that Google is too powerful and doesn’t care much about your privacy. I know many non-techies who switched to iOS or refuse to use Android because of privacy concerns. It’s not crazy to think that they’d be reluctant to buy a car from Google. It’s definitely not “extremely paranoid”.
Yes, but it's in flight mode usually, except once a day. If I've missed a call I call back the next day. My main issue are the spam callers. I turn the cell phone connection on temporarily when needed, for instance for using https://f-droid.org/en/packages/de.schildbach.oeffi/
or if I'm waiting for a call.
If you have an iPhone you can enable 'silence unknown callers' which will prevent your phone from ringing for any incoming call that's not in your contact list. This solves the spam problem.
You are not factoring in the economies of scale that will kick in if Waymo really figures out autonomous driving. It will change the world forever, and the costs will go down.
But they're only really trying to figure it out in fenced areas like Phoenix, no? It's not like they can get Phoenix sorted out and then start building systems that are intended to operate outside Phoenix -- I don't see any sort of a reasonable path to scaling. They're not building learning systems -- only training systems.
For anyone curious, if each ride takes 10 minutes, and the car can spend 8 hours a day doing rides, it would take 5.7 years for a car to give 100,000 rides. (I added a little to accommodate the price of charging the vehicles and maybe some maintenance)
I think this is pretty reasonable considering that for $5/ride I would expect there to be quite a lot of demand, and there's opportunities for things like food delivery as well.
If you're not a car owner, how do you get around in vehicles?
I offer that it's entirely possible that the tracking you are attempting to avoid, you may be already entirely subject to, via things like Uber or your mobile phone.
I doubt there's any meaningful way to avoid IC/Telco/FAANG location/movement surveillance these days.
This is not to say that your decision is wrong (it's the same reason I cancelled my Cybertruck preorder!), just that I think people like us may be out of luck.
>If you're not a car owner, how do you get around in vehicles?
With a subcription for the trams/trains/busses in my area. I use taxis sometimes, but not Uber. On holidays I like to share a car with others. If you share the costs, cars aren't even expensive.
I don't know. The police in the city of Basel bought seven Teslas. It seems this wasn't OK regarding data protection. And I don't know if it's OK now or if the police were just allowed to keep the cars because they had already bought them. According to an article, written in German, the police had to replace the SIM cards inside the cars with Swiss SIM cards [1]. IMHO this looks (partly) like a pseudo action because there is still an internet connection. (However, according to the article the cars are considered to be OK now.)
I wouldn't buy a Tesla and I wouldn't drive one if it was given to me free. Despite the legal property of a car title, you can't really own a Tesla, they control the software "activation" and "license" that it won't operate without. And even if you don't use the Autopilot sensors, Tesla uses them to collect data for itself.
Waymo would have all the same problems, except I doubt Waymo is targeting cars people would buy at all. Google seems set on delivering a transportation service. It's questionable if they'll ever sell their system at all.
Telsa is outright hostile in this regard, and several others. Regardless of if they make a good car, you have to accept a lot of negative things to purchase one.
Even if Alphabet was reluctant to invest their own profits, can't they borrow cheaply too?