Thursday Jun.17, 2021

🤖 Waymo's self-driving billions

_Don't try to backseat drive on this one [Westend61 via GettyImages]_

Hey Snackers,

It seems like everything is in short supply these days, from computer chips to cars and workers. Girl Scouts are having the opposite problem: 15M boxes of unsold cookies.

While Girl Scouts handled mountains of Samoas, the Fed handled inflation concerns. Stocks fell after the central bank indicated it expects higher interest rates by 2023, sooner than previously projected.

Drive

Google’s Waymo self-drives its way to a $2.5B fundraise — and it's putting itself on the Map

Can't be a backseat driver... when there's no frontseat driver. Waymo is the self-driving vehicle startup that was born out of Google's "moonshot factory." Google’s most successful moonshot is still a money-loser — but not when it comes to venture cash:

Waymo just raised a massive $2.5B to advance its self-driving tech. It calls its system "The World's Most Experienced Driver," which no other company can say (because Waymo trademarked the phrase).
Billions in the rearview: Explains the déjà vu. In March last year, Waymo raised $2.2B in its first external fundraise (read: not just Google $$$).

Waymo money... still problems. Waymo has driven millions of miles on public roads across the US. But Waymo and other self-driving companies have been criticized for moving slower than expected with commercialization. GM's Cruise, Tesla, and even Apple are all working on fully self-driving vehicles — in 2019, Elon said that self-driving robotaxis would be ready... last year. As of this month, Waymo has a big wheel up over the competition:

Waymo One: Waymo's fully driverless taxi service can now be accessed through Google Maps, the same way you get routed to Uber’s app from Maps to book a ride. Think: distance, wait time, etc.
Far from Uber status: The service is only available in Phoenix, where the bulk of Waymo’s 600 robotaxis are running. Good luck finding One.

Niche products need mainstream roads... Waymo has something that its biggest competitor Cruise doesn’t: a maps app with 1B+ users. By integrating Waymo into Maps alongside providers like Uber, Lyft, and Lime, Google can "mainstream-ify" robotaxis. It could compete on pricing with OG rides, and even integrate Waymo One directly into Maps to reduce friction (cue: potential antitrust issues). It could also weave Waymo into other parts of its biz — like: Google Pay and Google Home for seamless booking.

Huh

Apple faces roadblocks on its boldest (long-term) plan: platform-ifying healthcare

An Apple a day... keeps the Apple doctor close. Since 2016, Apple has been secretly working on an ambitious healthcare project (code name: Casper). In 2019, CEO Tim Cook predicted that Apple’s greatest contribution to mankind “will be about health.” People were like: "????." Now it (kind of) makes sense. According to the WSJ:

Apple has been trying to offer its own primary-care service with Apple-employed doctors at its own clinics.
Imagine: Health data from your Apple Watch and iPhone being monitored by docs. Apple employees were the first to test the app, called HealthHabit.

Spoiler... It's not going great. Besides allowing you to track your steps, the Fruit's health efforts have mostly flopped so far. It's not the only tech giant racing into the $4T healthcare industry — and others are facing hurdles, too:

Amazon is dabbling in telehealth and even launched a pharmacy, but it’s effort to lower healthcare costs fell apart.
Google has spun off its own biotechs like Verily, but its Google Health branch flopped and has been thwarted by privacy concerns.

Apple wants to make the next big platform… for our bodies. But that could take a while. With iPhones, iPads, and MacBooks, Apple built an ecosystem for our minds (reality: endless TikTok scrolling). Watch is Apple’s big bet on an always-on platform for tracking your health. Getting the data is Step 1. If Apple can track it reliably and put it to good use, it could snag its next massive opportunity.

What else we’re Snackin’

Juneteenth: The Senate unanimously passed a bill to make Juneteenth a federal holiday, and the House moved quickly yesterday to vote it through.
Unbucked: Roblox shares fell 8% after the online gaming company revealed it has fewer users than it did in April – they're also spending less.
Corolla: Toyota shares hit a record high. The world's biggest carmaker is boosting production despite the Great Chip Shortage.
Thirst: Diageo, the liquor legend behind Don Julio and Smirnoff, became the first spirits company to sign an NFL sponsorship deal.

Thursday

Weekly jobless claims
Earnings expected from Kroger and Adobe

Authors of this Snacks own shares of: Apple, Google, and Amazon

ID: 1689276

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Do you want to run the State Department of McDonald’s?

A couple of days ago, a tweet making fun at McDonald’s hiring a “Manager for Diplomatic Relations” went viral.

At first glance, the idea that McDonald’s, a burger franchise known for its double quarter pounders and perfectly salted fries, is expanding its diplomatic influence with policy makers in Foggy Bottom and the world at large sounds comical. But it’s actually crucial.

There are more than 40,000 McDonald’s locations spread across 115 countries around the world, and 90% of these stores are independently owned and operated franchises that pay royalties to the parent organization to operate. Tens of thousands of franchises operated by different owners with different beliefs, priorities, and values can get complicated, fast.

As we noted in Snacks in February, McDonald’s received heavy backlash from franchisees in countries including Saudi Arabia, Oman, Jordan, Kuwait, and Pakistan after McDonald’s Israel donated thousands of free meals to IDF personnel. But it wasn’t McDonald’s, as an entity, that made the donations. It was the owner of the company’s Israel franchises, who was acting under his own volition.

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Nuke stocks up on AI excitement

For most of humanity, the thought of “nuclear-powered AI” sends a shiver down the spine. But the stock market is all for it! Just check out the list of top performing S&P 500 stocks this year. Just behind established AI plays — Super Micro Computer and Nvidia, you’ll find Constellation Energy, the largest operator of nuclear plants in the U.S. NRG Energy, which also operates nuclear plants, isn’t far behind. Bloomberg reports that CEO of power distributor Exelon — which spun off Constellation in 2022 — says in the Chicago area alone, AI could drive a 900% jump in demand for energy from data centers.

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China makes Apple remove WhatsApp, Threads, Signal and Telegram from app store

In its latest move to restrict foreign tech, Beijing has ordered Apple to remove a number of popular messaging apps from its app store there, including WhatsApp, Threads, Signal and Telegram.

These apps had only been available through VPNs but were popular nonetheless, according to the Wall Street Journal.

Apple said the Chinese government asked them to remove the apps in the iPhone maker’s second biggest market over “national security concerns.” Last week, China told its state-owned telecoms to phase out the use of US chips by 2027.

Exclusive | China Orders Apple to Remove Popular Messaging Apps

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Tesla's recall reveals just how bad Cybertruck delivery numbers have been

Thanks to a recall of Tesla’s Cybertrucks, we now know how many of them have actually been delivered: 3,878 since the EV company began releasing them to customers in November.

In its third and fourth quarter earnings report, Tesla said that its current Cybertruck production capacity was greater than 125,000 a year. Musk had previously said he expected to produce 250,000 Cybertrucks a year by 2025.

Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

The recall is over an issue with the gas pedal pad that, the National Highway Traffic Safety Administration says when pressed, “may dislodge, which may cause the pedal to become trapped in the interior trim above the pedal.” The cause of the issue: “unapproved” soap that the manufacturer used to aid in getting the pad on the pedal.

A Cybertruck customer this week posted a TikTok about a terrifying incident in which this happened and “held the accelerator down 100%” in his 6,000+ pound vehicle. Thanks to some quick thinking where he held down the brake and put it in park, he wasn’t injured.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

Tesla recalls the Cybertruck for faulty accelerator pedals that can get stuck | TechCrunch

Either way, that’s a lot more than the roughly 775 it’s delivered each month so far.

This is the long-awaited Cybertruck’s second recall since it came out five months ago.

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Cocoa hits $11,000

Cocoa prices are breaking records on an almost daily basis — with cocoa futures closing at (another) all-time high of $11,020 per metric ton yesterday.

That’s up 158% since the start of the year, and over 4x on the typical prices seen in 2022 — as crop production continues to fall short of demand.

Major cocoa-producing nations like the Ivory Coast and Ghana, which between them grow about two-thirds of the world’s cocoa, have seen excessive tree failure due to disease, changing weather patterns, and hot, dry conditions causing devastating droughts.

As such, consumers are starting to see the effects of the largest cocoa supply deficit in over 60 years: “shrinkflation” and reduced-cocoa recipes might soon hit your favorite chocolate bars, and Hershey stock was recently downgraded. Unfortunately, the worst may still be yet to come: the International Cocoa Organization expects production to lag behind demand by 374,000 tons for the 2023-24 season.

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World out of balance: It costs the US 3¢ to make 1 penny

The cost of producing the US penny rose 13% in fiscal 2023 to 3.07 cents. Yes, that means that Uncle Sam loses more than two cents for every cent it produces. (And no, you can’t make it up on volume.)

For the record, that’s the 18th-straight year the penny’s face value has been below production costs, fueling calls for abolishing the lowest value denomination coin. Canada started to phase out the penny in 2013, joining Australia, Brazil, Finland, New Zealand, Norway, and Israel, according to Smithsonian Magazine.

3.07¢

Pop Quiz!

What’s the world’s busiest airport?

Don't be a sucka

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Netflix is going to stop sharing subscriber numbers

After posting subscriber numbers that beat expectations today, Netflix says it’s no longer going to share those numbers starting in the first quarter of 2025. That’s a big deal since subscriber numbers have long been one of the main metrics that investors have looked at.

“In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential,” its shareholders letter read. “But now we’re generating very substantial profit and free cash flow.” The company said that it will focus on revenue and operating margin as its main financial metrics, while it will look at time spent on the platform to gauge customer satisfaction.

Another way to read this? They’ve hit market saturation and just aren’t going to be growing that much anymore, and they thought they’d end on a good note. Going forward they’re focusing on how to get more money out of the customers they do have.

They’re doing so by cracking down on password sharing and charging for extra members. They’re also pushing people to ad tiers, which are more profitable than non-ad tiers.

“Scaling ads to become a more meaningful contributor to our business in ‘25 and beyond,” Netflix said.

Netflix’s ads membership grew another 65% in Q1 over the previous one, after rising 70% the quarter before, and 40% of signups in ad markets continue to be for those ad plans.

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