🤔 Google’s confusing $5B investment

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TOP STORY
🤔 Google’s confusing $5B investment

Guys, I’m still trying to figure out why Google just did this…

Earlier this week, Google announced plans to invest $5 billion into Waymo over the next few years, and I’m really questioning the decision.

For those unaware, Waymo is an autonomous driving technology company that focuses on developing self-driving cars and providing autonomous ride-hailing services.

And it’s owned by Google.

Waymo was started back in 2009 but was only approved to drive people in 2017.

I guess people were concerned about self-driving cars “not being safe” or something.

Anyway, Google’s most recent earnings call gave us finally a pretty good glimpse into the company.

Waymo's robotaxi business was projected to generate over $50 million in annual revenue for 2024, with more than 50,000 rides per week in just three cities: Phoenix, San Francisco, and Los Angeles.

But these numbers are really not so impressive at all. Why do I think so?

Because I looked at the stats of Uber and Lyft.

But don’t worry, I made it fair.

In 2017, about 7 years after Uber launched and 5 years after Lyft, these companies were miles ahead of where Waymo is now:

• Uber and Lyft accumulated around 170,000 trips per day in San Francisco, about 15% of all vehicle trips in the city.

• That’s about 5 million trips a month in just San Francisco alone, a lot more than the ~200,000 Waymo is getting monthly.

• And before you say that it’s comparing apples and oranges, ride-sharing was just as revolutionary back in the early 2010s as self-driving cars are now.

It’s such a crazy time to be alive.

Self-driving cars are becoming the norm, but Google, I’m really scratching my head on this one.

TECHNOLOGY
🔍️ OpenAI’s Google Search killer is finally here

Yesterday, OpenAI announced its highly anticipated search engine.

SearchGPT (a brilliant name, by the way) is an AI-powered search engine with real-time access to information across the Internet.

The search engine starts with a large textbox that asks the user, “What are you looking for?”

And actually helps you get there.

Instead of just listing links to your query, SearchGPT organizes and explains them.

• For example, if you’re looking for a music festival to go to, it’ll summarize its findings on different music festivals and then give short event descriptions with links.

• In another example, it tells you when to plant tomatoes, describes different types, and even lets you ask more questions or click the sidebar for more links.

It sounds like a smart cookie. Is it out yet? SearchGPT is just a "prototype" for now and will only be accessible to 10,000 test users at launch, but the goal is to eventually integrate the search features directly into ChatGPT.

Are they just gonna rip off publishers, like Perplexity did?

No, OpenAI has assured everyone they will not.

How? First, OpenAI has developed SearchGPT with news partners like The Wall Street Journal, The Associated Press, and Vox Media.

Plus, "Publishers can manage how they appear in OpenAI search features and opt out of having their content used to train OpenAI's models while still appearing in search," according to The Verge.

And the most genius part is that by releasing SearchGPT as a prototype, if it screws up and starts telling people to eat glue or jump off the Golden Gate Bridge like Google's AI model did, they have a valid excuse: "It just isn’t ready yet."

ENTERTAINMENT
👊 Warner Bros. Discovery is suing the NBA

Earlier this week, Warner Bros. Discovery, the owners of TNT, tossed up a hail mary in an attempt to nab the NBA’s new media rights deal from Amazon.

• The legacy media giant told the NBA it will match Amazon’s bid for its “C” package of games, worth around $1.8 billion.

• The new 11-year agreements with Walt Disney's ESPN, Comcast-owned NBCUniversal, and Amazon are worth $77 billion.

Here’s the breakdown of who gets what:

However, despite the 40-year history between the two sides, the NBA decided to partner with the more stable tech giant.

Now, WBD is suing the NBA in a potential existential move.

If WBD loses its NBA rights, which contribute 7% of its total EBITDA, it could:

• Costs $270 million annually in ad revenue due to the loss of NBA programming.

• Costs $250 million in WBD's adjusted EBITDA.

• Cause about $600 million of annual profit to vanish.

And it comes at a really crappy time for Warner Bros.

The company has over $40 billion in debt, and its stock is down 31.72% over the past 12 months — and down 72% over the past five years.

In contrast, Amazon’s stock is up over 42% in the past year and 87% over the past 5 years.

Not to be forgotten is that Amazon is about 63x bigger than Warner Bros., which not only shows why WBD needs some help ASAP, but also why the NBA thinks Amazon is a much wiser business partner for the long term.