Alphabet Prepares to Pour $5 Billion Into Waymo

Google’s parent company plans to invest an additional $5 billion into Waymo, with Alphabet CFO Ruth Porat notifying shareholders of the decision during the business' second-quarter earnings call. Despite 2024 being relatively unkind to autonomous vehicle programs, driven largely by resident pushback taking place in the cities they’re being piloted, Waymo has arguably come out looking better than its rivals and even managed to grow its revenue. But it’s still operating at a sizable loss and needs support from Alphabet if the plan is to eventually perfect the relevant technologies.

Porat stated that Waymo remains an important investment for the company and that Alphabet’s funding would take place over several years. The presentation stressed the brand trying to remain involved in novel technologies that prioritize data and likewise branch out into the physical world.

“We delivered revenues of $85 billion, up 14 [percent] year-on-year driven by Search as well as Cloud, which for the first time exceeded $10 billion in quarterly revenues and $1 billion in operating profit. As we invest to support our highest growth opportunities, we remain committed to creating investment capacity with our ongoing work to durably re-engineer our cost base,” Porat stated during the presentation.

“This new round of funding will enable Waymo to continue to build the world’s leading autonomous driving company,” CNBC later quoted her as saying.

From CNBC:

Porat announced the “multiyear” investment on the call and said more information would be available in the company’s quarterly Securities and Exchange Commission filing, expected on Wednesday.

Alphabet’s “Other Bets” unit, which includes Waymo, delivered $365 million in quarterly revenue, up from $285 million a year ago. But the unit’s losses widened to $1.13 billion from $813 million in the year-earlier period.

CEO Sundar Pichai said on the earnings call that Waymo provides 50,000 weekly paid trips, primarily in San Francisco and Phoenix. It has completed 2 million trips to date. In June, Waymo removed the waitlist and opened Waymo rides to all San Francisco users.

The unit raised $2.25 billion in its first external funding round in 2020. The company raised another $2.5 billion in 2021 in a round that included funding from Andreessen Horowitz, AutoNation, Canada Pension Plan Investment Board, Fidelity Management & Research Company and more.

Meanwhile, the media has grown critical of autonomous vehicles being tested on public streets after local residents began defacing and disabling Cruise-badged AVs located in San Francisco. Criticisms were likewise launched that local and state governments did not see eye-to-eye on the matter due to differing agendas.

Waymo avoided most of this by having received the brunt of its criticisms earlier on while testing in Arizona. However, it didn't manage to avoid everything that went wrong in California and even became the focus of a few truly sad accidents in San Francisco.

Accusations have also been made that Google’s news algorithm has intentionally downplayed Waymo failures while playing up the mistakes of its rivals. That certainly sounds plausible. But the company does indeed seem to have a better-than-average track record, perhaps due to it having sizable financial backing, direct access to Google’s mapping tech, and being able to field test vehicles before a lot of the competition.

Cruise recently announced that it would be indefinitely delaying its planned Origin shuttle service. It’s something that other companies hoping to provide similar services have also had to walk back — partially due to the fact these vehicles lacked traditional controls required by U.S. regulations.

Meanwhile, Waymo seems focused on building up autonomous technologies so they can be integrated into pre-existing models to be used more like traditional taxis. But this is something loads of companies, including Cruise, are likewise doing. Waymo has familiar objectives and just seems to have executed better in terms of both the relevant technologies and the public messaging. Executives have argued that this alone warrants major investments into the program.

“Alphabet has committed up to $5B to Waymo,” Waymo CEO Tekedra Mawakana posted to X this week. “We are grateful for their immense vote of confidence in our team and recognizing the amazing progress we’ve made with our technology, product, and commercialization efforts.”

[Images: Waymo]

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