Original image source.

by Brian Shilhavy
Editor, Health Impact News

It was announced this week that General Motors became the latest automobile manufacturer to get out of the driverless car business after wasting $10 billion over 8 years for their “Cruise” robotaxis.

GM Kills Cruise Robotaxis to Save $1B Annually

General Motors has announced it will no longer fund its Cruise Robotaxi program, effectively shutting it down.

“Consistent with GM’s capital allocation priorities, GM will no longer fund robotaxi development work given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market,” reads the press release.

High costs and accidents have plagued Cruise.

GM, which currently owns 90% of Cruise, will increase its ownership to 97% and eventually acquire the remaining shares. Cruise’s shutdown will also save GM $1 billion a year, according to the company.

Cruise staff told TechCrunch they were “surprised” and “blindsided” by the decision, learning about the transition at the same time as the media. Sunsetting Cruise could take several months, and GM has not yet said if any layoffs will occur as a result.

Cruise has had a tough time since October last year, when one of its robotaxis ran over a woman in San Francisco. Following the incident, the California DMV suspended Cruise’s license, forcing the company to halt operations nationwide until it had regained public trust.

Further, the company recorded a loss of $3.48 billion in 2023 and was fined $500,000 last month for providing false records on the San Francisco crash. (Source.)

GM joins Ford, Volkswagen, and others who have abandoned driverless vehicle development after wasting $billions over the years, only to realize that if such technology will ever be possible at a level that is profitable, it is still many years away in the future.

How did Wall Street receive this news that yet another major automobile manufacturer was abandoning driverless robotaxis?

They celebrated and started buying stock in the few remaining companies that are still trying to develop this driverless technology, as the NASDAQ topped 20,000 for the first time yesterday.

Stock market today: Nasdaq tops 20,000 for first time as Big Tech surges, Tesla hits first record in 3 years

The reason that was given for this surge in Big Tech stocks still invested in driverless vehicles yesterday, in spite of the news that GM was ending their robotaxi business, was that the robotaxi market was “too crowded”.

The remaining companies invested in robotaxis are mainly Google, Amazon, and Tesla.

Do any of these companies currently have a successful robotaxi business that they are no longer wasting money on, but actually turning a profit?

No.

Tesla currently has ZERO robotaxis on the road, with the first ones being promised in either 2025 or 2026, and Amazon just recently received approval to put their robotaxis, Zoox, on the streets of San Francisco, but don’t expect to offer rides to the public there until later in 2025.

That leaves, by default, Google’s Waymo as the only “successful” robotaxi model left, because they currently operate in 3 cities.

Investors refer to Waymo as “successful” because it was announced recently that they now have exceeded 100,000 rides sold per week in those 3 cities.

As its competitors falter, the Google-owned and California-based robotaxi service Waymo seems to be in cruise control.

According to figures the company shared in August, Waymo is now giving over 100,000 paid rides to customers each week in San Francisco, Phoenix, and Los Angeles, using its fleet of fully autonomous and specially-equipped Jaguar SUVs. That’s double the number of weekly rides it was giving in May, a clear sign of its growing dominance in this burgeoning market.

“At this point, the fully autonomous driving industry is really just an industry of one: Waymo,” former CEO John Krafcik, who is now a board member at the EV automaker Rivian, told The New York Times. (Source.)

However, to reach this “success” has taken Google 15 years, and they are still losing money.

Despite its healthy stream of customers, Waymo still isn’t profitable. Google’s experimental division, which includes Waymo, had an operating loss of around $2 billion in the first of this year, and the robotaxi company is most likely a significant portion of that loss, Mark Mahaney at investment research firm Evercore ISI told the NYT.

With even the industry leader still in the red, it’s a sobering reminder that the road to profitability is a long one, with no guarantee that it won’t lead to a dead end. (Source.)

In October this year (2024), investors invested another $5.6 billion into Waymo to keep it afloat. (Source.)

So while the major auto manufacturers can no longer afford to lose $billions every year on robotaxis, Google and Big Tech can.

What is Waymo’s current market value for operating at a loss in three U.S. cities?

About $110 billion, because that is what a driver-based taxi company is worth, Uber.

Why Waymo Could Speed Past Uber

The race to get self-driving taxis on the road is accelerating. Elon Musk’s Tesla plans to reveal its long-awaited prototype of one such vehicle, while Alphabet-owned Waymo announced last month that its autonomous vehicles soon would be available for Uber customers in Austin, Texas, and Atlanta.

These moves, along with Waymo’s recent success running a robotaxi service in Phoenix, Los Angeles and San Francisco that it says handles over 100,000 paid rides a week, offer concrete evidence that Waymo could become a viable business for the first time since Alphabet began working on the project more than 15 years ago.

Now the question becomes—what is Waymo worth?

Our very rough guesstimate is around $110 billion. Because Waymo is building a robotaxi business, we decided to assess valuation by comparing Waymo to Uber, whose market capitalization is now around $160 billion. (Source. Subscription needed.)

Uber recently became profitable after more than a decade of operating in the red. But compared to Waymo’s 100,000 rides a week in three cities, Uber is in every major city in the U.S., and offers over 23 million rides per day. (Source.)

So how can Waymo be valued at the same valuation as Uber??

Faith. That’s it. These valuations for driverless vehicles are 100% based on a religious-like faith in the technology, that someday, somehow, this technology is going to make a lot of people rich – after more than 15 years of trying and hundreds of $billions lost.

Uber doesn’t own a single car. And the cars that Uber passengers ride in only need a single human driver to drive it.

However, according to reports in the media that looked at Zoox, the “self-driving” car company owned by Amazon.com, it takes about 1.5 people behind the scenes to operate a single “driverless” car. (Source)

Since the election and Trump’s win, and with Elon Musk appearing so often in public with Trump, Big Tech is soaring again on the stock market creating what may be the largest financial bubble in history, because the Big Tech products haven’t changed, only the belief that Trump is going to remove regulations so Big Tech can do whatever they want, like put robotaxis onto the streets whether they’re safe or not, and whether customers want them or not.

How Long will this AI Bubble Last?

I am not the only one concerned about the current Big Tech bubble, but those sounding the alarm in the financial sector are currently the minority voice as everyone is still dancing in the Donald Trump Victory Parade, even though he hasn’t even taken office yet.

The AI explosion with ChatGPT is now 2 years old, and yet it is still experiencing the same problems in producing reliable search results as when it was first rolled out at the end of 2022, in spite of the $billions that keep being invested into it.

Emily Dreibelbis Forlini who writes on the AI topic for PCMagazine, recently wrote an article that reflects growing concern about AI LLMs providing anything of real value, along with users growing frustration with it.

In 2025, AI Needs to Put Up or Shut Up

The promise of AI is waning. It’s time for tech companies to stop making big promises and produce reliable, useful products that do more than line the pockets of CEOs.

In late 2022, ChatGPT was the topic du jour. There was a sense of something revolutionary and that entire industries would be upended.

Fast-forward two years, and the term “AI” elicits a more mixed reaction. The novelty of asking ChatGPT a question or generating a wacky AI image is gone, replaced by a sense of exhaustion around the buzzword of all buzzwords.

Last month, a study from Slack found that the percentage of American workers who are excited about AI helping them complete their tasks dropped from 45% to 36% over the previous three months.

This comes as companies like OpenAI, Google, and Anthropic see slower gains in technical progress. OpenAI co-founder and former Chief Scientist Ilya Sutskever tells Reuters we’re in an “age of wonder and discovery once again.”

In other words, back to the drawing board.

Personally, I’ll believe the 2022-era hype when I come across a generative AI tool that redefines how I use my computer, phone, or other devices.

PCMag has published 725 articles on AI this year, many of which I’ve written, and tested the splashiest releases (Google NotebookLM was a highlight).

Most, if not all, feel half-baked.

While I use ChatGPT, it doesn’t meet all my needs. The risk of hallucinations, plus a desire to sift through information myself rather than read a computerized summary, keeps me coming back to Google.

But when I go to Google, its AI Overviews often serve up inaccurate or not-quite-there information. (Google Gemini recently told a user to “please die.”)

Apple Intelligence has also been a let-down. After using it for a month, I want to turn off the sometimes confusing notification summaries. The first Apple Intelligence update for Siri was underwhelming, and the fully revamped version is now reportedly delayed until 2026.

It’s getting harder to see AI overhauling modern life, at least in the short term.

The companies pushing the tech see it differently, of course. (Full article.)

The autonomous vehicle market was reported at 208 billion in revenue in 2023, and is estimated to be 282.2 billion in 2024, and is anticipated to more than double in 2025, reaching 428.3 billion. (Source.)

And this “revenue” is what investors are investing into this technology, NOT what it is earning in the marketplace.

To give this massive amount of money being wasted on driverless vehicles some perspective, total imports of products from China into the United States was $501.22 billion in 2023. (Source.)

That means that the expected money to be spent on driverless vehicles next year will be about 85% of the money importing products from China.

That means everything Americans buy from retail stores like Walmart, Target, Home Depot, Best Buy, etc., and a whole lot of other things that we import from China that keep our economy running, is almost equal to the money being spent on driverless technology, not to mention the hundreds of billions spent on other types of AI technology.

Is that a sustainable economy? Wouldn’t the rational thing to do for national security be to STOP the technocrats from ruining this country, by implementing regulations to STOP them from putting these dangerous vehicles on America’s public, tax-funded roads?

Well, that’s not President-elect Donald Trump’s plan. His plan is to ABOLISH regulations that are holding Big Tech back, and then implement tariffs on China-imported products that actually have REAL value and are purchased by Americans every day, making them much more expensive.

What could go wrong?

Elon Musk’s one profitable company is SpaceX, which derives almost all of its revenue from Government contracts to purchase his rockets and satellites.

Is this the plan for other Big Tech products?

The only way I can see something like driverless robotaxis become profitable, is to subsidize the entire industry, which is basically what has produced the over-priced and over-hyped Electric Vehicle (EV) industry, because American consumers do not want EVs. They want gasoline cars, or hybrids.

Could we soon see the day where illegal migrants coming into the U.S. through our open borders, and the homeless people proliferating on the streets of America’s major cities, be given access to driverless vehicles for free, while also giving them pre-paid cards to charge them at recharging stations?

Then they could start their own government-funded version of Door Dash or Uber Eats, and start delivering goods to the Americans who actually work for a living, as they are ordered to stay home and work from home, while these robotaxis operated by migrants and homeless people bring everything to them.

That’s the direction this country is heading to, if American’s don’t wake up soon and realize that the U.S. Government and Big Tech care only about themselves and their wealth and power, and only serve their own interests, and not the interests of Americans.

Resist. Don’t use their products. Don’t participate in or obey their edicts.

Because without the consent of the public, their plans cannot succeed.

Related:

Big Tech “Far-Right” Billionaires want to Eliminate Politicians and “Democracy” as They Believe They can Run the World Better by Themselves

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