Published on September 16th, 2017 | by James Ayre0
Alphabet (Google) Has Spent Well Over $1.1 Billion On Self-Driving Vehicle Development To Date
September 16th, 2017 by James Ayre
The parent company of Google, Alphabet, has now spent more than $1.1 billion on the development of self-driving vehicle tech — with that figure relating to funding from the start of the moonshot program’s Project Chauffeur in 2009 through the end of 2015 — according to a deposition recently given by Waymo’s Shawn Bananzadeh in relation to the firm’s lawsuit against Uber.
Considering that amount of work done by Alphabet’s Waymo since the end of 2015, the company has no doubt actually spent far more than “just” $1.1 billion on self-driving vehicle tech development by now.
Bananzadeh, a financial analyst at Waymo, gave his deposition as part of the lawsuit that Google filed against Uber alleging the theft of trade secrets, as well as patent violation. Apparently, Google/Waymo is arguing that as its tech has yet to be commercialized, any potential damages awarded should be calculated based on the development costs to date.
In response to a question from one of Uber’s lawyers asking about how the development figure for “trade secret 90” (for lack of a better way to word that here) was calculated, Bananzadeh stated: “My understanding is that it is a cost that captures the entire program spend from inception to the period of time where it stops.”
Here’s more: “He later clarified that meant from 2009, when Sebastian Thrun got the go-ahead for the project from Larry Page, to the end of 2015. Throughout Bananzadeh’s deposition, every dollar amount was redacted to protect Waymo’s confidential commercial information. Every time, that is, except in the Uber lawyer’s very next question: ‘The calculation that was the basis of the $1.1 billion cost estimate for Trade Secret 90 is the same calculation that was done for Trade Secret 2 and Trade Secret 25?’
“Waymo had apparently given an identical $1.1 billion cost estimate for each of the trade secrets being discussed. Bananzadeh was unable to provide a clear answer as to why that might be, except to say, ‘Insofar as it is part of the entirety of this self-driving system …. therefore, all of the costs of the program since inception … are what then informs that number.’
“Waymo’s position seems to be that all of its trade secrets are inextricably linked to the whole self-driving car project, and any damages should reflect that fact.”
So, what’s the takeaway from this (other than the fact that Google has access to large amounts of spare cash to fund various expansion plans)? In my opinion, it’s that Waymo/Google may end up with a commercially viable self-driving vehicle tech product that was obtained for far less than its rivals will end up paying for theirs.
You’ll recall here that most of the data that we’ve seen to date seems to show that Waymo/Google has the most reliable self-driving test cars out there — by a fair margin. Also recall that GM last year paid $1 billion to acquire Cruise Automation, in order to gain a foothold in the sector, and Ford paid nearly the same to gain a stake in Argo AI, for the same reason. Elsewhere, Intel of course recently paid $15.3 billion to purchase the self-driving vehicle tech pioneer Mobileye.
Considering that Waymo/Google seems to be by far the closest to market readiness, as well as the financial figures discussed above, it’s starting to look like the others will end up paying quite a premium to catch up.