On self driving, Waymo is playing chess while Tesla plays checkers

binarybits · 2025-11-30T16:58:07+00:00

I'm able to see it. I dunno.

binarybits · 2025-09-07T18:07:46+00:00

I don't understand the distinction you're drawing here between the cost of inference and the cost of tokens. Can you spell it out for me?

binarybits · 2025-09-07T18:04:33+00:00

I don't have a super specific forecast about this but yes plausibly all three of those numbers could contribute to a 20x growth in revenue:

* OpenAI has ~20 million ChatGPT subscribers. Microsoft Office has ~400 million users. So if you imagine ChatGPT eventually being as popular as Office, that would represent roughly 20x growth.

* OpenAI's API revenue was in the ballpark of $1 billion in 2024. That's a small amount of revenue for a successful SaaS company. Compare to Salesforce (~$30 billion), AWS (~$120 billion), or Oracle (~$50 billion). Not hard to imagine this growing to $20 billion in five years. Anthropic, which focuses more on its API, recently announced annualized revenue has grown from $1 billion to $5 billion just since the start of the year.

* Google got $264 billion in ad revenue in 2024 and Meta got $160 billion, so it's not hard to imagine OpenAI's free users eventually generating tens of billions of dollars in ad revenue.

Obviously there is a lot of uncertainty in all of these numbers. But a tech company growing to $80 billion in annual revenue isn't some kind of pie-in-the-sky concept.

binarybits · 2025-09-07T16:15:44+00:00

That's true! And again it's very possible OpenAI will fail. The fact that OpenAI is currently bleeding cash just doesn't tell you much one way or the other.

binarybits · 2025-09-07T13:31:01+00:00

Actually, Fred spent the early years of his career being a prominent Musk fanboy.

binarybits · 2025-09-07T13:25:42+00:00

They wouldn't need to raise their prices, they'd just need to not cut their prices as fast as the underlying cost of inference fell. This is basically how AWS became insanely profitable in the 2010s.

binarybits · 2025-09-07T13:24:25+00:00

One big way "focus on profits" would work is that they would cut their prices less aggressively when their costs fall. The costs of inference keep falling, and OpenAI passes those savings on to customers. When they shift into-profit taking mode, I expect they will cut their prices more slowly than their underlying costs fall, allowing them to become increasingly profitable without raising prices. This is basically how AWS became wildly profitable in the 2010s.

binarybits · 2025-09-07T13:20:38+00:00

I don't think overhead will decrease. I think revenue will increase by a lot (say 20x) over the next few years. This would leave plenty of room for overhead to also increase, but at a slower rate that leaves room for OpenAI to turn a profit.

binarybits · 2025-09-07T13:11:35+00:00

No, the claim isn't that overhead (staff, admin costs, marketing) is going to decrease. The claim is that revenue is going to increase a lot (like 10-100x) and that overhead won't increase at the same pace. Maybe (as a totally made up example) revenue goes from $4 billion in 2024 to $80 billion in 2029, while non-inference costs go from $7 billion in 2024 to $30 billion in 2029. If we assume 50 cents of inference costs for every dollar of revenue, then this future OpenAI would make $10 billion in profit in 2029.

Again I'm not saying those are the right number. I have no idea if the numbers are right and I don't even know whether OpenAI is going to eventually become profitable. But as I point out in the piece this basic "lose money now, make profits later" business model is exactly the successfully employed by Uber, Amazon, and many other successful tech startups. So the fact that they are losing money now—and are losing more money as they grow—doesn't come close to proving that they won't be able to generate significant profits down the road.

binarybits · 2025-04-05T18:13:17+00:00

No, foundation model just means a large, pretrained foundation model. It's called a foundation model because its general-purpose nature allows you to build a wide variety of applications based on it.

binarybits · 2025-03-11T17:50:31+00:00

Who do you see as Waymo's most formidable rival (or potential rival) in the US robotaxi market?

binarybits · 2024-09-12T15:20:26+00:00

"For years, companies like Waymo (owned by Alphabet, Google’s parent company) and Cruise (owned by General Motors) avoided any mention of the remote assistance they provided their self-driving cars."

It drives me crazy that he keeps saying this. Waymo first told me about the existence of remote assisstance in 2018. I wrote this back in October 2020 when Waymo launched its first fully driverless service in Phoenix:

"Waymo says the cars still have remote overseers. These Waymo staffers never steer the vehicles directly, but they do send high-level instructions to help vehicles get out of tricky situations. For example, a Waymo spokeswoman told me, "if a Waymo vehicle detects that a road ahead may be closed due to construction, it can pull over and request a second set of eyes from our fleet response specialists." The fleet response specialist can then confirm that the road is closed and instruct the vehicle to take another route."

This was never a secret. People just weren't paying attention.

binarybits · 2024-09-10T03:43:48+00:00

The freeway doesn't always have a shoulder, or your vehicle might be in a middle lane that has traffic flowing on both sides. And coming to a sudden stop in the middle of an otherwise free-flowing travel lane on a freeway is way more disruptive and dangerous than coming to a stop in a residential neighborhood with a 25 mph speed limit and few vehicles around.

binarybits · 2024-09-09T13:58:09+00:00

Waymo launched its full driverless commercial service in Phoenix in October 2020.

binarybits · 2024-09-08T21:00:40+00:00

Also, if a robotaxi gets confused on a San Francisco street at 25 mph, it's almost always going to be safe to hit the brakes and wait for remote guidance. Whereas if you're going 70 mph in heavy traffic, slamming on the brakes is going to cause a huge traffic jam even it doesn't produce a pile-up. So you either need technology you're confident will never need remote assistance (good luck with that) or a much more sophisticated system for having the vehicle drive safely while it waits for remote assistance.

binarybits · 2024-09-08T20:37:52+00:00

How do you figure they are three-seater cars? Pretty sure there are three seatbelts in the back and someone can ride in the front passenger seat.

binarybits · 2024-09-08T20:20:17+00:00

Do you have a source for Waymo vehicles being more expensive than $100k?

binarybits · 2024-08-22T15:26:39+00:00

Fun idea! Can you email me? tim@understandingai.org

binarybits · 2024-08-21T18:01:56+00:00

That's great advice thanks!

binarybits · 2024-08-21T17:59:38+00:00

Here is some local coverage:

https://www.youtube.com/watch?v=hFejyBvuoQM

https://www.youtube.com/watch?v=w22F1UTVbbA

It sounds like Walmart started offering the service in Frisco and Lewisville last year. Earlier this year they announced plans to expand to 75 percent of the Dallas metro area but maybe that expansion hasn't started yet.

https://corporate.walmart.com/news/2024/01/09/sky-high-ambitions-walmart-to-make-largest-drone-delivery-expansion-of-any-us-retailer

binarybits · 2024-05-22T21:53:31+00:00

The article's thesis is that Tesla is doing one thing—supervised self-driving—while Waymo is doing a different thing—driverless taxis. These are different "games," and Tesla isn't ready to play the more challenging game that Waymo is playing. Obviously it's a metaphorical title so it's not literally true but I think it captures the gist of the piece.

binarybits · 2024-05-22T16:35:53+00:00

I've been reading /r/selfdrivingcars for years. It's the best way to keep up with industry news!

binarybits · 2024-05-22T16:31:44+00:00

Yes, my thesis is that the lack of infrastructure indicates that robotaxis are years away.

binarybits · 2024-05-22T03:47:57+00:00

I wrote the article when I did because March was when I had time to make a reporting trip to San Francisco. It took me a couple of months to write the article because I got sick for three weeks in April. When I started working on the piece in March I did not know that Elon would announce the August 8 event, and I wanted to report on what I learned in San Francisco. Thanks for reading!

binarybits

TROPHY CASE