Google Has Spent Over $1.1B on Self-Driving Tech

https://spectrum.ieee.org/cars-that-think/transportation/self-driving/google-has-spent-over-11-billion-on-selfdriving-tech

by mcspecter • 9 years ago

124 85 9 years ago

spectrum.ieee.org

Fricken2• 9 years ago

I wonder if this includes the 'Fuck you money' engineers on project Chauffeur received for passing certain milestones. Earlier in the depositions it was disclosed that Levandowski was paid a 120 million dollar bonus, though it wasn't revealed how much was given to others on the project.

https://www.bloomberg.com/news/articles/2017-02-13/one-reaso...

nostrademons• 9 years ago

Levandowski's $120M was an earn-out from the acquisition of his startup:

https://spectrum.ieee.org/robotics/artificial-intelligence/t...

(Note the date: this is well before Otto and the Uber/Waymo flap.)

It probably is counted in the $1.1B spent on self-driving tech though.

Fricken2• 9 years ago

It was disclosed in the depositions that the 510 systems acquisition was worth about $20 million:

http://www.foxbusiness.com/features/2017/05/23/how-star-engi...

The bonuses were paid out at the end of 2015. It was shortly after that that Levandowski revealed Otto to the world. Plus Chris Urmson started Aurora, and Brian Salesky went on to become CEO of Argo, which is Ford's autonomous Driving subsidiary.

They all got some kind of huge bonus. It supposedly amounted to a 14% rise in the aggregated quarterly expenses of Alphabets 'other bets', which lumps together a bunch of Alphabet's moonshot subsidiaries.

amaks• 9 years ago

And $120 million of that amount got paid to Anthony Levandovski?

siddarthd2919• 9 years ago

It is not really that much! 1.1 B in 6 years on a moonshot project.

ChuckMcM• 9 years ago

Seriously, I'm mean what else are you going to do with a bit more than a billion dollars? Develop a full line of Google rockets and disrupt the space industry or something? :-)

But you raise an interesting point, what should we expect from 6 years of effort and 1.1B$ ?

[1] https://www.nasa.gov/pdf/586023main_8-3-11_NAFCOM.pdf

[2] http://www.businessinsider.com/17-billion-dollar-companies-c...

robotresearcher3• 9 years ago

It's a lot if it doesn't pay off eventually.

visarga2• 9 years ago

The same tech that is being used in self driving cars could be repurposed for autonomous robots, and end up with a market much bigger than that of transportation. SDCs are just the easiest form of autonomous robots.

rhizome• 9 years ago

And aren't there tax advantages too?

tuna-piano• 9 years ago

I think by most accounts -

1) Google / Waymo is by far the furthest ahead in self-driving tech.

2) Self-driving is possible in at least certain circumstances in the next decade or two (already is to an extent today).

3) Transportation / automobiles is an absolutely massive industry. Even companies like Dana, Inc (maker of axles) have $4bil valuations. It's easy to see how a self-driving tech maker would be worth far more than an axle maker.

4) Software tends to be a winner-take-most industry.

Given 1-4, $1.1B doesn't seem like much. Even if by chance it doesn't turn out to be a positive ROI, it seems crazy to think the $1.1B was a bad bet.

And given current prices for self-driving startups (example, Gm's acquisition of Cruise for >$1B), the current market value for Waymo would likely be >$10B.

WhitneyLand• 9 years ago

How do you come to that first conclusion?

It seems difficult to tell who is the “furthest ahead” because it’s a pretty complex race.

For starters, we can’t even say with certainty who all of the competitors are. Some are very quiet or at early stages but could be working on a breakthrough problem that turns out to be a pivot point.

Some are specializing. Who is going to scale up the best and most cost efficient solid state lidar? There’s a whole list of key problems being worked on.

Do you mean hardware or software? Just the algorithms are a huge piece. Just hardware is a huge pieces.

Beyond price and performance, it’s common that unforeseen factors end up being important in determining who becomes the most successful in selling traditional manufacturers components or whole systems. Surely we don’t realize all of them yet.

Also there is so much still being held close to the vest. These guys are keeping lots of secrets about how far along they are truly, roadblocks, etc.

ocdtrekkie2• 9 years ago

Indeed, the only comparison we have for Google's progress in most cases is what they claim. The few times other parties have stepped in and spoken up, there's been some less rosy truths in there.

It's in all of these companies' best interests to look like they're in the lead.

The tech we can judge the progress of is the tech we can actually test and use.

agumonkey• 9 years ago

They started early and seriously, unlike manufacturers who embraced it with marketing in mind and then put "beta" products on the road. Google were the first to gather massive amount of data on SDV.

Maybe they're not the first right now, but they're safely in the lead, waiting for the others to fumble.

eco• 9 years ago

How do you come to that first conclusion?

I don't really trust any of the marketing (including videos) or friendly articles about how far along companies are. The best way to judge I've seen is by the mandatory reports companies testing in California must supply. By those, Waymo is far, far ahead as of 2016. They've driven 635,868 miles (two orders of magnitude more miles than their next closest competitor) and their miles driven per disengagement was 5,128 (an order of magnitude higher than the next closest, with many still in single digit miles per disengagement). I'm eager to see 2017 numbers. Perhaps one of the other major companies has caught up but I'm doubtful. That's a wide gap to close in a year.

Sure, the numbers could be gamed a little (just drive on the same road you can do perfectly every time every day all year) but doing that will never let you improve your real world performance (important for the big companies heavily invested in this, not so much for the smaller companies looking to get acquired).

I think it's reasonable to just ignore all the small companies working on this in stealth. It's all about testing for self driving cars. They can't perfect it just sitting in a garage and thinking really hard about what problems they may encounter and maybe a few prototype vehicles. They need as many cars as they can on the road driving and collecting data on real world situations.

throwa893243• 9 years ago

I work for one such "early stage" startup - all we do is bullshit VCs by showing them research done by other people, and then passing them off as our own.

Animats2• 9 years ago

Who is going to scale up the best and most cost efficient solid state lidar?

Probably some big auto parts company. Continental [1] and Denso [2] are both building solid state LIDARs. Quanergy seems to be all hype.

Maybe automatic driving is just going to be a set of components Tier I auto parts makers sell to auto companies. That's how ABS braking and stability control works. Those are the companies that can make electronics work reliably in the automotive environment.

It may not be a race, either. Many major auto manufacturers expect to ship some form of automated driving in the 2020-2021 model year. There's no reason to expect one big winner here.

As for "transportation as a service", Avis, the car rental company, is getting ready to do that. They're servicing Google's self-driving test fleet in Austin, so they'll be ready to go into that business when the time comes.

[1] https://www.continental-automotive.com/en-gl/Passenger-Cars/... [2] https://www.wsj.com/articles/toyotas-biggest-supplier-to-tak...

naasking• 9 years ago

Given 1-4, $1.1B doesn't seem like much.

Seriously, they'd make trillions from self-driving tech. They'd end up spinning off an Uber-like self-driving ride service, and then they can track you and serve ads to you wherever you go. The data mining potential alone is huge.

AJ007• 9 years ago

Bill every business for each delivered customer.

Don't care to participate? Your steakhouse will show up on Google Maps if the user knows precisely where to zoom in or the exact name of the restaurant. Otherwise, "Hey Google, take me to a great steakhouse" and off we go..

muzani• 9 years ago

lol my first instinct was that they would charge a fee, but forcing you to watch YouTube commercials sounds so Google.

eighthnate• 9 years ago

4) Software tends to be a winner-take-most industry.

Yeah. I think this is it. I remember when google paid $1.6B for Youtube 10 years ago, people thought they were insane. Look at them now. Youtube dominates the web as video platform.

Pretty much the successful self-driving AI platform will probably dominate the market and will be installed in most cars. Like how Android dominates the smartphone market.

In tech/software, it seems to be winner-take-all market.

madisfun• 9 years ago

Youtube dominates the web as video platform.

Is it profitable?

tanilama• 9 years ago

Apparently Tesla is the furthest ahead in terms of having a sellable product. Google however, no matter how fancy their technology maybe, they don't have a window to demonstrate yet and need to rely on existing auto manufacturers, which is developing their own arms of self-driving rapidly and they have vast advantage as to collect data.

mycall• 9 years ago

Then look at Apple, buying up all the tech they need.

MarkMc3• 9 years ago

4) Software tends to be a winner-take-most industry.

That's true of software generally, but not will not be true of automated driving software.

Windows, iOS, Facebook and YouTube have strong network effects. Google search and Microsoft Office offer a familiar user interface and superior features.

Self driving software will have none of these benefits - there is no network effect, no significant user interface, and no feature differentiation. As soon as there are 3 self driving software products on the market that meet minimum safety standards, competition will force the price down to little more than the cost of development. What's more, that cost of development will diminish over time: If in 2027 a company decides to develop self driving software, the development cost will be much less than the $1.1 billion Google has paid. So over the long term the economics will be similar to airlines - suppliers offering a commodity product and generating thin margins.

Although the long-term trend is bleak, Waymo does have two short-term advantages: 1) possibly being first to market; 2) its suite of patents on self-driving tech. Personally I don't place much weight on these advantages so I would value Waymo much less than the stock market. As an Alphabet shareholder I very much hope that they spin off Waymo so I can sell my interest in self-driving tech.

georgeglue1• 9 years ago

There are massive economies of scale. If Google is first to mass market, they will have a large information lead. From there, their cars could take better routes and handle more edge cases.

There's a similar network effect and economy of scale that applies to Waze + Google Maps' lead in mapping.

ballenf• 9 years ago

Agree for the most part, but question the lack of network effects here:

Is there not a potential interoperability / safety gain if all the cars on the road know how all the others will react? In a game of chicken they know they should each veer right to avoid an accident, so to speak.

I guess the answer depends to some degree on just how much inter-car communication is part of the future and whether those will be fully standardized. And even if standardized whether additional proprietary communications will be permitted between the same species.

Finally, isn't there a race on to collect as much detailed driving data as possible to train these systems? So the more a system is deployed the faster it will improve and therefore be more attractive?

I guess my question is really whether meeting minimum safety standards is going to be the sole question that purchasers of self-driving tech ask before buying. It's not too hard to fathom different techs being a "smoother" drive or maybe even able to handle more side roads (and thus more shortcut options) that other techs aren't ready for yet.

adrianN2• 9 years ago

That is, if somebody figures out how to make good autocars without absolutely massive amounts of training data. For now it looks like whoever gets their software out in world first will have a huge advantage just because they get much more telemetry than the competition.

the84722• 9 years ago

1) possibly being first to market;

If you are first to market with selfdriving cars AND manage to transform transportation into a ride-hailing service then you might get a natural regional monopoly wherever you build out the fleet support infrastructure, similar to other utility services. Plus brand recognition for that service.

nojk88• 9 years ago

pfft...self driving cars aren't like smartphones. If you think of our road and traffic networks across the world the places this stuff is going to work is going to be very very low, i.e. there are upper limits on scalability. It's going to be costly and in the hands of a few for a long time to come.

flexie• 9 years ago

I agree that 1.1B isn't that much given the potential size of the market (and given the size of Google's profits, it's a surprisingly small bet they've made).

But how do you arrive at the conclusion that Google is way ahead? I cannot buy a Google car with self-driving capabilities. I can't even buy a car from any other manufacturer with Google's self-driving software in it. I can buy several other cars with some degree of self-driving tech in them, most notably Tesla, but also Volvo and Audi and others.

Already now, you have tens of thousands of Teslas driving around in either self-driving mode or in what is in essence a "recording" mode where they record and simulate. They drive in all kind of traffic, roads, rules, weather, light etc.

Meanwhile, you have a few hundred Waymobiles mostly driving around the perfect, dry and pristine Northern Californian roads with 25 mph. They have merely logged in 3M miles in almost 10 years. That's the equivalent of 10,000 Teslas driving 10 miles per day for a month. In a couple of years you will have a million Teslas driving on the roads. And you probably still just have a few hundred Google cars driving around engineers.

Google is losing the number game with its boutique approach. Waymo is WayBehind.

jvolkman2• 9 years ago

The Tesla data recording sounds great on paper, but despite all that hypothetical data Autopilot still can't stay in its lane: https://www.youtube.com/watch?time_continue=2&v=ALEMd9WZJtE

adventured• 9 years ago

$94 billion in cash burning a hole in their pocket. $20x billion in new cash pouring in annually, expanding by 10%-20% per year.

In another two years they'll be net cash richer than Apple is (as unlike Apple they pay no dividend and have almost entirely avoided taking on debt).

There aren't very many large companies they can buy with that money, due to perpetually increasing anti-trust concerns. I suppose they could maul ~$25 billion buying Snap and probably get away with it due to Facebook (but comeon).

So what to do? Burn $1.1 billion on self-driving tech. Will it pan out? Doesn't really matter. Their search monopoly isn't going anywhere near-term (probably) and they'll have $200 billion in net cash in another 4 or 5 years. They could vaporize $11.1 billion on self-driving tech in the next couple of years and it would not matter, either to shareholders (oh, some would pretend to be upset) or to their operations.

SapphireSun• 9 years ago

That's amazing. Would it be fair to say that at this point it's a dollar optimizer with no reasoning beyond it?

killjoywashere2• 9 years ago

I can't remember if it was Lazlo Bock or Eric Schmidt, but in one of their books (both?) someone reports a board member opining "You've created the first self-replicating talent machine." Having worked with those cats, that might actually be true.

bitmapbrother• 9 years ago

So what to do?

They've spent over 30 billion building GCP. I'd rather they continue expanding GCP than waste a dime on Snap.

coldtea• 9 years ago

Don't know about how it's in the US, but if it's anything like in some European countries, a question is:

How much of that $1.1 are recouped as "investments in research" etc. and thus contributing to tax-deductions (and in some cases even subsidies)?

jellicle2• 9 years ago

100% of it would be tax-deductible. Corporations don't pay tax on any money spent on salaries, equipment, expenses, etc. Whether there would be ADDITIONAL subsidies, I do not know.

mempko• 9 years ago

Only $1B? Kind of highlights that they are not that serious yet about the technology yet.

simonsarris• 9 years ago

Serious question: Why not acquire Tesla and position yourself leaps and bounds ahead of the other tech giants?

0xbear2• 9 years ago

Because Tesla is a money losing, capital intensive business they don't know how to run. See e.g. their Motorola debacle.

killjoywashere2• 9 years ago

I rather seriously doubt Elon is selling Tesla.

Salgat• 9 years ago

He owns 22% of shares.

gordon_freeman• 9 years ago

Maybe because Google's self driving tech is fundamentally different than that Of Tesla's. Tesla relies on sensors and vision based system whereas Google relies on LIDAR. So I don't think they'd able to integrate the Tesla's self-driving tech into Waymo in any ways.

tybit• 9 years ago

I think while the technical differences could be resolved the biggest blocker would be cultural. Musk has been super aggresive in rolling out more and more self driving features, where as Google and everyone else seems to be much more cautious.

davesque• 9 years ago

Can anyone put this figure in context? I'm inclined to imagine that $1.1B is chicken feed for Google.

jldugger• 9 years ago

https://finance.google.com/finance?q=NASDAQ%3AGOOGL&fstype=i...

Google made 3.5 billion in their most recently reported quarter. It would have been even higher, except for a nearly 3 billion dollar 'unusual expense'. It's not exactly chicken feed, but 1.1B isn't an unexpected number given their focus on 'other bets'.

0xbear2• 9 years ago

Meh. Less than Hillary's presidential campaign.

userbinator• 9 years ago

Google already has a huge amount of power over where people go on the Internet. It seems having power, however indirect, of where people go in the real world is their next goal, and it is quite deeply unsettling to consider. Imagine self-driving cars that will be cheaper but take you to "sponsored places" before going to your destination, refuse certain destinations "for your safety", and play ads continuously while you're helplessly transported around.

Given that amount of power they will have if they succeed, spending $1B on the (very real) possibility of getting to that situation is definitely expected. And very very scary for everyone else.

jellicle2• 9 years ago

"Since you uploaded a video which was removed from Youtube, your Google Driving account has been permanently revoked."

slewis• 9 years ago

They've likely spent way more than that, since the article's number is only through the end of 2015:

"Between Project Chauffeur’s inception in 2009 and the end of 2015, Google spent $1.1 billion on developing its self-driving software and hardware"

anigbrowl• 9 years ago

It's a lot and yet it somehow seems cheap at the price. DAROA seems to invest on a similar scale.

asdfologist• 9 years ago

And over 10% of it went to Anthony Levandowski.

Animats2• 9 years ago

Probably more since the end of 2015, since they've been increasing the number of vehicles.

lpolovets• 9 years ago

To put this in context, $1.1b is about 3 weeks of operating profit for Google. Considering the upside for Google if their experiment pays off, this seems like a pretty smart bet.

known• 9 years ago

And Uber won over Google's self-driving tech;

dingo_bat• 9 years ago

With literally nothing to show for it except litigation with Uber.

cmarschner• 9 years ago

The top German car suppliers and car makers have accrued 10x the patents on autonomous driving Google has [0]. Bosch alone has 3x the number of patents. Yet hardly anybody talks about Bosch and Continental and Mercedes/Audi/BMW etc.

[0] http://www.businessinsider.in/Whos-in-the-lead-in-developing...

discreteevent2• 9 years ago

They do generally tend to keep things very quiet until they launch.

bukgoogle• 9 years ago

you really trust your family to be in car that doesn't have a steeringwheel and it's controlled by "don't be evil" google ???

Seriously people, wakeup!

siscia• 9 years ago

But am I the only one thinking that maybe we are trying to solve the wrong kind of problem?

If we had spent the same amount of money into creating a grid of mini-train I believe that most cities would already have some working prototype...

And mini-train is a control problem that we could solve yesterday...

(With mini train I mean something roughly big as a car but that is constrained to move in some predefined path, it will means that they could move way faster than cars and be more space efficients...)

Google Has Spent Over $1.1B on Self-Driving Tech

Related Stories