Is there a bubble in self-driving startups in Silicon Valley?
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Silicon Valley could fall victim to a self-driving car bubble
There's certainly a clear financial incentive to jump into the space.
waymo
There's certainly a clear financial incentive to jump into the space, as the traditional auto industry, flush with cash after a multi-year sales boom, looks to take command of autonomous-vehicle technologies and "future proof" itself.
General Motors bought Cruise Automation, Fiat Chrysler Automobiles has partnered with Google/Alphabet's Waymo, and Ford just took a majority stake, to the tune of $1 billion, in Argo AI, a machine learning startup.
In fact, according to Ford's Chief Technical Officer, Raj Nair, a billion is about what it costs to develop so-called "level 4" autonomy, which is one stage shy of the vehicle completely driving itself, with no human input.
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Do the math: some founders, some engineers, and within a few years — or even less than that — a self-driving startup can exit, or find additional funding, at the going, unicorn-making rate. That's an appealing trajectory with IPOs not counting for much in Silicon Valley these days.
It's reminiscent of what Facebook was inspiring a few years back, when it bought, in quick succession, Instagram, WhatsApp, and Oculus — companies that plugged holes in Facebook's platform, or that future-proofed the social network.
The action has shifted to autonomous vehicles in a big way. And the major players in the Valley are aware of it. Tesla recently sued the former head of the Google Car project, Chris Urmson, and Sterling Anderson, who ran Tesla's Autopilot program from 2015-2016, for stealing the electric automaker's intellectual property in pursuit of a new venture, Aurora Innovation.
In the lawsuit, there was this rather interesting language:
Bloomberg's
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