In a recent discussion, an early Uber investor, Jason (referred to as Jcal in his disclaimer), shared several opinions, ideas, and predictions regarding the future of the autonomy space, forecasting significant merger and acquisition (M&A) activity.
**Jason's Key Predictions:**
* **Uber Acquisition:** He suggests not to be surprised if Tesla, Amazon, or Google buys Uber for around $300 billion (about double its current market cap) to "win the deployment of autonomous vehicles."
* **Waymo Strategy:** Don't be surprised if Waymo buys a car company.
* **Consolidation to Compete with Tesla/Waymo:** He predicts DoorDash, Uber, and/or Lyft might merge, and then buy a car company (specifically mentioning Lucid, Rivian, and VW) and an autonomous vehicle (AV) company like Avada Euro, in order to compete.
* **Market Growth & Valuation:** He states that in 18 months, companies like Uber, DoorDash, Lyft, Rivian, and Lucid could be worth 50% to 100% more, or be involved in M&A transactions. He believes potential buyers like Amazon, Google, Waymo, and Tesla could acquire these assets for 1% to 15% of their valuations, moving them "right to first place" in autonomy.
* **Hypothetical Number One Players:** He outlines combinations that would create a "number one player," such as:
* Amazon + Uber + Waymo
* Tesla + Uber
* Uber + DoorDash + Euro + Lucid (making them "#1 by far player")
* Waymo + DoorDash + Uber
* **Rationale:** Jason argues that when a huge market like autonomy emerges, consolidation follows, citing the PC and internet eras as precedents. He also disclosed having stakes in "almost all of these companies."
**The Speaker's (Steven's) Rebuttals and Agreements:**
* **Tesla Buying Uber:** The speaker strongly rejects this idea, stating there is a "0.0% chance that Tesla buys Uber for 300 billion or even for a pack of gum and some skittles," and claims he would "retire from creating content" if it happened.
* **Waymo Buying a Car Company:** The speaker sees this as a "next logical step" for Waymo to try and reduce its "absolutely embarrassing current hardware costs," but believes it would ultimately be a "waste of capital" as they couldn't sustainably catch Tesla's costs.
* **Lucid/Rivian/VW Acquisitions:** He "strongly suspects that Lucid... are hoping to get acquired," and wouldn't rule out Rivian or even "the burning dumpster fire that is a Volkswagen" being acquired.
* **Desperation, Not Brilliance:** The speaker believes that any such mergers/acquisitions by Uber, DoorDash, or Lyft would stem from "sheer desperation" and an "existential crisis," rather than "strategic brilliance." He points out that their current business models are "absolutely fucking cooked" with the advent of cheap, ubiquitous autonomy because their biggest cost is the human driver.
* **Tesla's Unmatched Position:**
* **Cost & Scale:** He argues that "the list of companies today profitably producing electric vehicles at scale has only one name on it: Tesla." He claims no "giga entity" could match Tesla's capability for "affordably producing autonomous electric vehicles at scale."
* **Cybercab:** Tesla's dedicated robotaxi, the Cybercab, is projected to be produced for "sub 20,000 US dollars," benefiting from a reinvented manufacturing system, less material, mass, and complexity than human-driven vehicles. He challenges any company to come close to this cost.
* **Autonomy Software:** Tesla is the "only company with the enormous amount of data required to solve general autonomy."
* **Limited Competition:** The speaker speculates that if Jason's thesis holds, other entities would either have "extremely low budget tacky non-luxurious alternatives" to match on cost, or offer superior features at a "massive cost disadvantage," leading to thin margins or losses.
* **Agreement on M&A:** The speaker does agree with Jason that "big M&A is coming to space" out of desperation and that consolidation will occur in the autonomy market. However, he likens merging struggling companies to having "two Titanics" instead of one.
* **Speaker's Own Prediction:** "Tesla + time = number one player."
* **Analogy for Competitors:** He describes Tesla's future business as a "gold encrusted diamond," while any proposed giga entity would be a "turd with sprinkles on it."