If there was ever any doubt about the potential impact of autonomous (self-driving) vehicles, it should have been put to rest last October when Qualcomm Inc. (NASDAQ: QCOM) paid $47 billion for Netherlands-based NXP Semiconductors. NXP was then and is now the largest supplier of chips to the automotive industry.
That single acquisition accounts for more than half of all investment in autonomous vehicles since August 2014. The next largest investment was Intel Corp.’s (NASDAQ: INTC) March 2017 acquisition of MobilEye for $15.3 billion. Chipmaker Nvidia Corp. (NASDAQ: NVDA) has reached partnership agreements with Audi, parts supplier Bosch, Daimler and PACCAR (trucks), although no cash is reportedly involved.
In the nearly three-year period between August 2014 and June 2017, some $76 billion has been investments in autonomous vehicles, according to a new report from the Brookings Institution.
The report’s authors note, “Investment in self-driving cars appears to be the leading edge for AI [artificial intelligence] development.” Furthermore, although there is still some debate about how long it will take for the technology to be widely adopted, “there is consensus that this time will come in a matter of years rather than decades.”
One good indicator of that shortened timeline is the investment in autonomous technology by major automakers. German carmakers Daimler, BMW and Volkswagen paid $3 billion for digital mapping company HERE in 2015, and Intel invested $390 million in the firm in January of this year. General Motors Co. (NYSE: GM) paid $500 million in January 2016 to partner up with Lyft on driverless technology, and two months later GM paid $1 billion for software developer Cruise Automation.
Ford Motor Co. (NYSE: F) made a relatively small $16 million investment in driverless car company NuTonomy in May 2016 and dished out $1 billion this past February for software company ArgoAI. Peugeot also has announced a partnership with NuTonomy.
Technology firms like Apple Inc. (NASDAQ: AAPL), which invested $1 billion in Chinese ride-sharing firm Didi Chuxing, and Baidu Inc. (NASDAQ: BIDU), which has made several investments totaling more than $300 million, are in the game.
Alphabet Inc. (NASDAQ: GOOGL) is believed to have invested $1.1 billion in autonomous driving technology between 2009 and 2015, before the company spun-off its Waymo self-driving car company. That figure is probably low, according to a report in IEEE Spectrum because the company lumped spending on its self-driving program in its “Other Bets” category.
The Brookings report concludes:
If autonomous vehicles are the leading edge of artificial intelligence investment and development, then the $80 billion or more invested in that sector is a precursor of things to come in fields like natural language processing, image recognition, and others as these technologies gain commercial momentum.
With car companies now focused both on autonomous driving and electrification of their future fleets, the big decisions going forward are likely to be buying versus license agreements with the tech firms that are building the chips, software and other technologies needed for fully autonomous vehicles. As Brookings notes, 2016 may have been the tipping point for investment in self-driving cars.
The full Brookings report includes a spreadsheet that shows 56 different investments made over the three years and the amounts of those investments where available.
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