He was asking about the trend of him commenting with "Source?" leading to downvotes on other posts. I was giving an extreme example to represent why that may be happening elsewhere. I agree that in this case with the 3% rate it's likely not applicable.
What I'm talking about is that is still considered an external capital raise for the purpose of the markets and where those assets sit on the balance sheet.
Also, keep in mind the Alphabet doesn't fully own Waymo. I don't know the percentage ownership of hand, but that also feels like it's probably a prorated investment based on ownership so Alphabet doesn't reduce its voting control.
Yes and what matters the most is what Waymo has been signaling for years. They don’t want the capex (owning and running the physical cars). I don’t know the intent of this raise but you have to realize companies may have a good asset but they don’t want to own it 100% for a multitude of reasons. Some of them could be as simple as wanting to get other investors involved and comfortable with the asset to maybe take on larger roles in future rounds. Or in this case potentially running the car part of the business.
If they truly wanted the capex, this would not be a mixed round
A fully internal recap would have been simpler. The presence of outside capital, even minority, is consistent with a gradual transition toward shared ownership, asset light structures, or operator partners.
They have made many comments over the years about this too.
Notice I left a list of potential reasons. Not that ownership has changed. Just pointing out for folks like yourself that Google has made commentary about this exploring the idea of partnering with companies that operate the physical fleet. $3bn even if chump change for you is still a larger placement and has some level of signaling indicating the want to get other folks involved at some level.
I didn't ask for potential reasons. You're talking about the "reasons" for a "gradual transition," and I am telling you that this investment isn't transitioning anything. Everyone is keeping their equal share of the company. So, I don't understand why you are giving reasons for something that isn't currently happening.
I think the words are going over your head sorry. I will try one more time but realize now it might be too much especially see some of your dead comments here.
I am not claiming a transition is happening in this round, so asking for evidence of one misses the point. Transition here means enabling future shifts in who owns and operates the capex, not changing the cap table today. If Alphabet wanted permanent full-stack ownership, an entirely internal recap would have been cleaner. Bringing in outside capital, even minority, is about signaling and optionality, not dilution.
I understand everything you have said. The D-K of you WSB transplants is wildly frustrating.
If you'll notice, all I am doing is asking the brigade of snarky know-nothings to stop talking. I'm not pretentiously claiming to know, unlike all of you. You clearly aren't in any position to understand the internal working of Google, and it's unfortunate that HN used to be a place where a question like the original one would have been answered by a person who does, but is now flooded with people like you. I will gladly take the downvotes if they're from a bunch of garage band stock pickers.
Go take a breath and stop digging a hole. Nobody is being rude to you but you are highly inflammatory and honestly a real lowering of quality. Take a bit of your medicine and step away. I am sorry you feel the need to be so rude back to everyone.
You are not “just asking questions.” You are dismissing any analysis that is not insider gossip as illegitimate, which is a convenient way to avoid engaging with the substance. No one claimed NDA level insight. We are talking about incentives, capital structure, and signaling, which is literally what outsiders analyze. If only Googlers are allowed to reason about Google, then HN has no purpose beyond rumor laundering.
I definitely modulated my tone to match yours and some of your killed comments. Sorry you don’t like what you see. Happy to have a discussion but not be told I am someone from Reddit. Low effort and low class. You are consistently being rude and you just need to reflect on some of your comments. Your right my comment back to you was definitely not nice but look at some of your killed comments. Ick.
Sure thing boss. What other advice stemming from your vast experience, wealth, and psychological heath do you have for me? I'd love to improve my image to you... the "ick" police.
My finance people care about the cents, a ROI of 7% is average but at 8.5% and now you are a world class asset of that inventory type. That’s sometimes the difference of a few hundred k out of 20m but they would not take the deal if it is slightly over due to their risk appetite.
The 3b external either matters a ton to fit their risk models OR they are doing a favor to an outside party. Probably a bit of both.
Well, given that it is an equity sale, split still feels like it is the prorated amount so that alphabet continues to own its percentage - not more not less.
Obviously you're entitled to your view, but I don't think it's that kind of finance model right now - it's far too speculative and the upside too unknown to be adjusting for small amounts on risk models.
He's talking specifically about Waymo's situation. Alplabet, a company who has $75bn of FCF, owns 80% of Waymo. A $16bn capital injection is meaningless to Alphabet, so he's wondering why they're going through the trouble.
He raises a good point, and the answer is likely that they can run into legal issues by either under or overvaluing the company in a capital raise where they're the controlling shareholder, then the IRS or existing investors have grounds for a lawsuit (or audit). They likely just want to bring the capital raise out in the open to get a fair market value, and then they will be 90% of the capital in the raise.
Hacker News likes to keep conversations focused on the topic at hand. I doubt anyone here thinks politics are irrelevant. We just understand basic courtesy. If your goal is indeed to influence change, you do a massive disservice to the cause by acting immature and injecting your politics into other conversations.
> Quite likely this year we will have federal law that will allow selling cars with fully unsupervised self-driving, in which case the insurance/liability will obviously land on the maker of the system, not person present in the car.
This is news to me. This context seems important to understanding Tesla's decision to stop selling FSD. If they're on the hook for insurance, then they will need to dynamically adjust what they charge to reflect insurance costs.
I have a Model Y with AI hardware version 4. It is phenomenal at self-driving, and if your impression of FSD is a year old or older, then you are woefully out of date in understanding where the tech is today. If I could, I would send my own grade school child off to her friend's houses and extracurricular activities in my car unaccompanied. It is safer than buses, taxis, and me. Not since Tesla created the first economically viable EV for the American public have I been as excited about a revolution in automotive technology. Other than the fact that Tesla still needs people out there manually driving to generate training data, I don't think Tesla should be selling cars at all. I fully support this move, and all I have to say is thank God for Waymo, so we can have good competition in the Robotaxi market.
I'm done listening to pundits doubt Elon. I haven't seen Wall Street forecast future economic and technological trends well at all. Elon has created an EV market, caught falling rocket boosters, created the leading AI "nonprofit", and launched a worldwide satellite internet service, mostly in the face of rent seeking financial professionals and hacker news SSEs calling him dumb. I'm not sure what else a man needs to do to prove he deserves a little deference in his strategic decisions.
> Not since Tesla created the first economically viable EV for the American public have I been as excited about a revolution in automotive technology.
What do you mean by "economically viable" and "for the American public"? I wouldn't count the Roadster because it was expensive (~$100k) and only produced in limited numbers (~2500 over its lifetime). I'd say that to count as for the American public a car has to be quite a bit more affordable than that, and quite a bit more available.
This entire comment section has a lot of polarizing statements that are unverifiable and can hide behind the fog of truth. Yours is not one. Yours is easily verifiably false:
The US definitely peaked a long time ago, and we're in the slow demise phase of its empire, but I think China has already peaked as well. They have the same obesity and consumerism crises that have plagued the US. Add to that a demographic implosion, and I think the best they can do is hope for 20 more years.
Next 20 years is when PRC will really start cooking. In that period, PRC going to be doubling/tripling skilled workforce more than they have now (currently slightly above parity with US), this is already baked in from past 20 years of birth and current tertiary trends. That workforce, the greatest high skill demographic dividend in recorded history, will hang around for another 40+ years. They will have 40-60 years of operating with as much high end talent as OECD combined within a coordinated system. Past 2080, unless they sort out TFR, things could go bad, but for relevant timeframes, i.e. most of our lifetimes, they're going to be peaking.
> Next 20 years is when PRC will really start cooking. In that period, PRC going to be doubling/tripling skilled workforce more than they have now
The population pyramid for 2045 for China is not favorable ( https://www.populationpyramid.net/china/2045/ ). Currently the 30-39 bracket is 121 million, but by 2045 it will be about 83 million.
You could be arguing that the percent of skilled labor workforce in there will be going up over the next 20 years - but the size of the bracket is drastically decreasing while it becomes more and more weighted to the 65-85 age bracket.
Excuse wall of text. TLDR Generic demographic doomer math based on naive reading of demo pyramid fails in PRC case (and many others), demographics =/= destiny, i.e. doesn't account PRC social economic factors. Not all cohorts are equal in income/education disparate country like PRC, where old cohorts are literally worth "less", which allows PRC to arbitrage between young/educational/rich vs old/uneducated/poor.
1) Workforce is 20-60yos, conservatively ~600m (more with retirement reforms) in 2045, roughly 2-3x US workforce with disproportionate STEM bias. If current tertiary trend keeps up, that's 6-8x US STEM workforce backed by RoW combined in automation synergy, which will slowly decline over decades, and since white collar they can hang around much longer past retirement unlike blue collar. Now the 2045 demo pyramid is not favourable for 2065 talent generation and if no fix, trend towards disastrous by 2080s, but in terms of actual absolute high skill workforce advantage vs competitors, it's almost unassimilable amount combined with industrial density for like 50 years. That's within the timeframe of building hegemons.
2) For 2045s 65-85s - they are overwhelmingly old/poor (undereducated, left behind by modernisation). They "weigh" SUBSTANTILLY economically less than their actual headcount. The bottom 2 quantiles of PRC constitutes <10% of GDP, each skilled young-rich workforce making just median income replaces ~6 low productively elderly. People fixate on the 4:2:1 dependency ratios as if each generation is weighted the same like in advanced economies - they're not - PRC's income disparity is huge buffer against dependency ratio. Those 65-85s are tail gen of worth "less" cohorts who will also die magnitude richer than any generation before them. This also not considering PRC has 90%+ home ownership rate, some of the highest savings in the world, i.e. the 4:2 generation is brought up to depend on themselves. This is a very different cohort to caretake for - PRC is not advanced economy demo composition, where paycheck to paycheck new gen are increasingly less rich/young than previous gen but still has to prop up onerous social welfare net for rich/old. PRC is unequal society where new gen massively more productive than old gen, has high savings culture, many geographic income disparities to arbitrage COL, and high home ownership, i.e. you can throw all the elderly in a nicer tier4 city where COL is peanuts. People don't realize PRC old before rich is a FUCKING BLESSING, i.e. they're not even JP/SKR where old is now rich and a high burden, where they tapped out on skilled workers as % of workforce with lower home ownership and savings rate, and uniform geographic economy means they can't dump old in substantially cheaper COL regions.
Finally flip side of 4:2:1 ratio, where the 4:2 has high savings + property) is once older generation starts to croak = multiple wealth transfers to younger gen (at least in terms of property). If extrapolated (this is speculative but mechanically likely) much of current PRC TFR issues is combination of excess competition and delayed family formation due to absolutely brrting tertiary in compressed period where talent:job supply:demand are mismatched. Current cohorts are growing up in fucked period where 20m new grads were competing for 15m jobs, vs near future where 10m new grads are pick and choosing from 15m+ jobs. By 2030s, aka when most current skilled cohorts are established it's going to be MUCH easier justify having kids, because projected involution pressure will be gone, no need to be top 1% of gaokao etc, unless AGI and crazy automation because their kids will be guaranteed to enter society with stupid amount of job vacancies / opportunities, and likely multiple properties. Like the natural outcome of current demo structure is most PRC new gen will have roof over head, not live paycheck to paycheck, and once cost of competitive child rearing goes, because every child guaranteed job, all current factors stalling family formation disappears. Of course other factors can throw this off, but this is likely where current PRC demo + social economic factors will converge.
For all intents and purposes, Xi is worth far more than anyone in the west could dream of. It may not be reflected in stock certificates and bank balances, but if money is just the potential energy of power, Xi can do more than every US billionaire combined.
The difference mostly shows up in policies. Nobody is saying the top leadership of the CCP isn't enriching themselves. What they're noting is that the top leadership is small enough that this enrichment doesn't (yet) necessitate tilting the entire economy towards enrichment of its elites, at the cost of harming economic growth. The key word there is yet.
You see broadly different outcomes in many authoritarian countries, for example Russia. You might also argue that much of the short-term decision making we've seen from US industry lately is driven by the need to produce returns to stockholders, at the cost of long-term investment.
