
Google Has Spent Over $1.1B on Self-Driving Tech - mcspecter
https://spectrum.ieee.org/cars-that-think/transportation/self-driving/google-has-spent-over-11-billion-on-selfdriving-tech
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tuna-piano
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
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.

~~~
eco
> 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.

~~~
xyzzy_plugh
Isn't Uber testing in Pittsburgh and Phoenix? They wouldn't report those miles
to California.

What about R&D outside of the US?

I don't think California reports are an adequate measure of progress.
Additionally, I am not sure mileage matters as much -- you even suggest why in
the next paragraph.

------
Fricken
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...](https://www.bloomberg.com/news/articles/2017-02-13/one-reason-
staffers-quit-google-s-car-project-the-company-paid-them-so-much)

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

[https://spectrum.ieee.org/robotics/artificial-
intelligence/t...](https://spectrum.ieee.org/robotics/artificial-
intelligence/the-unknown-startup-that-built-googles-first-selfdriving-car)

(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.

~~~
Fricken
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...](http://www.foxbusiness.com/features/2017/05/23/how-star-engineer-
sparked-war-between-google-2.html)

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.

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

~~~
killjoywashere
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.

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cmarschner
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...](http://www.businessinsider.in/Whos-in-the-lead-in-developing-
self-driving-car-technologies-Hint-its-not-
Google/amp_articleshow/60284606.cms)

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

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lpolovets
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.

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siddarthd2919
It is not really that much! 1.1 B in 6 years on a moonshot project.

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

~~~
visarga
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.

~~~
robotresearcher
> SDCs are just the easiest form of autonomous robots.

That's a claim I have never heard before and I don't agree with. You have some
kind of argument to support that drive-by claim? Since there are no fully
autonomous SDCs yet you'd have to explain away any existing autonomous robots.

~~~
the8472
Roads are a fairly structured and rule-based environment already designed with
machines operating on them in mind. And those aspects that are not designed
for the physical properties of cars are still designed to be easily
perceptible by the human operators, e.g. signs, lane markings.

That can't be said for many other environments in which autonomous robots
would have to operate.

~~~
robotresearcher
There are literally millions of Roomba cleaner robots sold. They are
autonomous.

Simple, but autonomous.

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coldtea
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)?

~~~
jellicle
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.

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

~~~
jldugger
[https://finance.google.com/finance?q=NASDAQ%3AGOOGL&fstype=i...](https://finance.google.com/finance?q=NASDAQ%3AGOOGL&fstype=ii&ei=BX68WZm5FNT82AbHrI-4AQ)

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'.

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siscia
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...)

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

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

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slewis
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"

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

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

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bukgoogle
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!

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asdfologist
And over 10% of it went to Anthony Levandowski.

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

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0xbear
Meh. Less than Hillary's presidential campaign.

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

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

~~~
killjoywashere
I rather seriously doubt Elon is selling Tesla.

~~~
Salgat
He owns 22% of shares.

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userbinator
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.

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

