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Our conversation began with what some have treated as a sensational headline, a temporary Waymo disruption during a San Francisco power outage. Lee and I agreed almost immediately that this was noise rather than signal, and that the real story lies in how far ahead Waymo already is in the autonomous driving race.
Miles driven and cities conquered
I opened by emphasizing what matters most in autonomous vehicles today: miles driven and cities conquered. Waymo has logged millions more autonomous miles than Tesla and operates in multiple cities where regulatory approvals have already been secured. That matters because robo-taxis are not approved nationally. Each city represents a separate regulatory hurdle, and Waymo has already cleared far more of them.
Lee agreed that while Tesla’s technology continues to improve, Waymo’s experience advantage is substantial. These systems learn from edge cases, and the company with the most real-world data holds a powerful edge that cannot be replicated overnight.
Regulation favors the incumbent
We also discussed how misunderstood the regulatory process is among investors. Autonomous driving is a local gamble. Cities and municipalities decide whether these vehicles operate on their streets, not federal agencies issuing blanket approvals. That reality strongly favors Waymo, which has already built trust with regulators and local governments.
While Tesla’s system is vehicle-centric and tied exclusively to Tesla cars, Waymo operates independently of manufacturing. That distinction could prove critical as the market scales.
The Android versus iOS analogy
I made the case that Waymo is effectively positioning itself as the Android of the auto industry. Tesla’s autonomous software works only within its own vehicles, similar to Apple’s closed ecosystem. Waymo, by contrast, can partner with multiple manufacturers, opening the door to rapid global adoption across brands and continents.
Lee agreed that this flexibility is likely to accelerate worldwide deployment, especially among automakers looking to remain competitive without building their own full-stack autonomous systems.
Investment implications
We closed by tying the discussion back to Alphabet’s broader investment case. Waymo is just one component of a company that continues to execute across multiple growth vectors. Lee pointed out that Alphabet, along with Nvidia, has been one of the few mega-cap technology companies outperforming the S&P 500 this year, reinforcing why it remains a core long-term holding for both of us.
Tesla may still succeed in autonomy, but at this point in the race, Waymo is ahead on the metrics that matter most.
Transcript:
[00:00:04] Doug McIntyre: So Lee, it’s sort of old news that a bunch of these Waymo, robo taxis stopped working in San Francisco, when there was a power failure. Listen, I think these things aren’t ready for prime time. I don’t think the Tesla’s ready. I, I would say the most important thing to look at right now is Waymo has a huge headstart right now over Tesla and it is what I call miles driven, cities conquered. That’s what I call, right?
[00:00:34] Lee Jackson: Right.
[00:00:34] Doug McIntyre: They’ve driven many, many times the miles that Tesla has in the millions. As a matter of fact, they’re in two or three times as many cities.
[00:00:44] People need to remember something, robo vehicles are a local gamble because these things are approved locally. Right. You, can’t call the transportation department and say, I’ve got the greatest Woo. I got an auto drive system. You’re gonna love it. Yep.
[00:01:02] Lee Jackson: Right, right.
[00:01:05] Doug McIntyre: So if I have to make a bet right now, listen, both could do well.
[00:01:10] If I want to bet on the horse that’s ahead, I’m betting on Waymo. I’m betting on
[00:01:14] Lee Jackson: Well, yeah. And clearly this is a tech issue that will be quickly resolved. It was just an embarrassing thing for, for the Tesla robos to be working fine in, in the blackout in San Fran and the Waymo’s were stuck at lights, or lights that were out.
[00:01:31] But yeah, I think in the, in, in the bigger picture, they have a big lead and, it’ll be interesting to see if this even stays around, what happened or if it’ll just be a non-issue going forward.
[00:01:45] Doug McIntyre: Their engineers have fixed it by now, I’ll bet.
[00:01:48] Lee Jackson: Oh, I’m, I, would suspect they have or they’ve been fired.
[00:01:52] And new engineers are fixing it. But yeah, I agree.
[00:01:55] Doug McIntyre: I think this is a shame that the press does this, but when you look at new technologies, car technologies, particularly EVs and automatic, self-driving, they always decide they’re gonna go for the sensational story. Not understanding that these things have been driven tens of millions of miles.
[00:02:12] It’s look right. Reuters, the Wall Street Journal, they’re all into this thing that the tech, the cyber truck and some of the Tesla cars have these automatic, electric doors and one or two of them didn’t open in a fire and people got killed. I get it. If you said to me today, would you rather drive in the back of a car with one of your sisters driving, or in a Tesla or Waymo vehicle for the rest of your life? I would pick the Tesla or Waymo vehicle there. Listen there, I understand that if you’ve got a guy who drives in the Indy 500, it may or may not be safer, but for the most part, I would much, much rather have a non-human AI a powered car.
[00:03:02] Lee Jackson: Well, and, you don’t have to listen to some cab driver from, or Uber driver from who knows where, but yeah, I agree.
[00:03:11] And Waymo is way ahead and that’s just yet another reason why Alphabet remains your favorite and my favorite tech stock because it seems like everything that they’re doing, they seem to be hitting on all sectors and I think we’ve told people this, that the only two mag sevens, that are outperforming the s and p 500 this year are Nvidia (NASDAQ: NVDA) | NVDA Price Prediction and Alphabet.
[00:03:36] The rest of ’em are underperforming. So it’s just like, well let’s stick with the big boy. And maybe that’s why Warren Buffet bought it, like we discussed.
[00:03:45] Doug McIntyre: Well, there’s one last thing I like about Waymo. Tesla’s, AI, self-driving car works on one kind of car, right? Right. Yeah. The Waymo partnerships could be with many, many, many car companies.
[00:04:02] Waymo does not build its own car. So the idea that they could partner with somebody that’s a really big manufacturer and get broad distribution, they could do that with more than one car company.
[00:04:15] Lee Jackson: Absolutely, they could. Absolutely.
[00:04:17] Doug McIntyre: It’s like Android. Okay. It’s like Android and iOS. Right? iOS only works on Apple (NASDAQ: AAPL) products.
[00:04:23] Right. Android works on every other smartphone. Yep. I’m gonna say this, I’m gonna be the first person to ever say this in the history Waymo. Okay. Is the Android of the automobile industry.
[00:04:40] Lee Jackson: I don’t think a lot of people will put it in that position, but I think you’re exactly right because it will be.
[00:04:48] And that’s not just the American domestic car companies, it’s the car companies around the world.
[00:04:51] Doug McIntyre: No, that’s my point. Yes.
[00:04:53] Lee Jackson: Yeah. And it’s a good point because it’s gonna be probably, a much faster adoption worldwide because the other one has to be in a Tesla. So Yeah, that’s an outstanding point.
[00:05:06] Doug McIntyre: If you’re the losers who run Stellantis (NYSE: STLA), how fast do you want to use that Waymo technology?
[00:05:11] Lee Jackson: Not so fast. It’s ridiculous. I know. Yeah. Alright, well, we’ll leave it at that. But my goodness. Yeah. I have not done this yet, so I’m kind of excited about getting in one of these at a Waymo at one point and see how it goes.
[00:05:25] They’ll have ’em in Mississippi soon. Okay.
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