Alphabet Inc (NASADQ:GOOGL), Quietly, Just Stunned the WorldDate Published: 2018-04-03
Written by: Ophir Gottlieb
Alphabet Inc (NASDAQ:GOOGL) quietly went where no one thought it would, and though the market has not caught on yet, it's a massive step at diversifying this mega technology company.
There are no two-ways about this story -- Alphabet is taking on Tesla, taking on Detroit and Germany -- and is creating a brand new business that could be the scale of Google.
Before we dig in, let's just take one step back and look at the remarkable revenue growth for Alphabet, even at scale:
Of all places, the news broke in one of the smaller news sources we cover in real-time on CMLviz.com, but this is the story:
Waymo and Honda reportedly will build a self-driving delivery vehicle together
Waymo is the self-driving sub company of Alphabet, which we have been raving about for some time. here is our most recent dossier covering this part of the Alphabet monolith: Google - There's More.
In that dossier we focus on the self-driving business that Alphabet's Waymo is pursuing, and how, even with a great head start by Tesla, it's Alphabet that may be the real winner when this finally plays out.
Here's a quick chart to visualize the opportunity, broadly:
This is the expected growth in the market for self-driving featured cars:
We're looking at 134% compounded-annual-growth rate for the next five years ending at 10 million cars by 2020. But Google wants to create totally self-driving cars - not a vehicle which features self-driving capability.
In a tweet sent on May 9th, Waymo revealed some stunning progress on the number of miles the company has driven to help train its neural networks. Here is the tweet (click on the image to see the chart):
We've reached 3 million miles of self-driving on public roads! That's 1 million miles in just 7 months pic.twitter.com/VsC1ZSscbY— Waymo (@Waymo) May 9, 2017
Here is some commentary from The Verge:
The point here is that it will take millions of miles to get this technology right and turn it into a real business and the company is doing it. And there's even better news -- or that is to say, news that proves this process is actually working.
California's DMV released its annual autonomous vehicle disengagement report on February 1st of this year and it shows that Alphabet Inc's Waymo cars are failing at a much lower rate, even as they are driving a whole lot more miles.
Here is a chart:
Dmitri Dolgov, the head of self-driving technology for Waymo said this:
With all of this, one bit we hoped for, but never saw evidence for, was partnering on manufacturing, and that has happened.
Waymo's CEO went further when he said:
A partnership for actual manufacturing is a totally new world for Waymo, and it's a market that is the scale of Google. While Facebook deals with its realities of earnings all of its business from selling advertising space, Alphabet has quietly turned to other businesses.
We detailed all of them in our CML Pro dossier Google's Upside Is Absolutely Enormous and Unaccounted For.
Even in that dossier, we weren't ready for auto manufacturing.
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