Strategic Investments
When it comes to self-driving cars and other autonomous vehicles (AVs), investors are much more interested in the data they'll collect than the cars themselves.
The self-driving car bubble burst as technological reality fell far behind AV companies' lofty predictions. But Wall Street investors are still interested in AV companies that come from a more analytics-driven background, according to Axios. The trend suggests that the real value of AVs could be the data on passenger and driver behavior that they generate — and not, counter-intuitively, the technology that's actually operating the cars.
Hard Split
Axios pointed out that Morgan Stanley analysts recently assigned vastly different values to leaders in the AV space depending on each company's background: after GM, traditionally a carmaker, announced some delays, Morgan Stanley analyst Adam Jonas argued that the valuation of GM's AV division should be dropped from $11.5 billion to $9 billion.
Meanwhile Waymo, a subsidiary of Google's parent company Alphabet, has a stronger data analytics background — Jonas' colleague Brian Nowak argued that Waymo is worth $37 billion but could quickly rise to $175 billion as AVs become more popular, Axios reports.
"The value is in the data and what you can do with it," Jonas said in the Axios post.
Gold Mine
Personal data is immensely valuable, and a surefire way for tech companies to raise funds and boost their value is to ensure that they'll be able to get their hands on it.
With Intel's 2016 prediction that self-driving cars would generate four terabytes of data — equivalent to 8 million digital photos — every single day, investors have made it clear that they value the companies that won't let all that digital treasure go to waste.
READ MORE: Wall Street is split on self-driving cars [Axios]
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