Business
Facing skepticism, Elon Musk unveils prototype for driverless robotaxi
Tesla Chief Executive Elon Musk presented a lofty vision for the future Thursday night, unveiling prototypes of a self-driving taxi and van that he said would revolutionize travel and claiming the electric car company would put fully autonomous vehicles on the road by next year.
At an event on the Warner Bros. Studios lot in Burbank, Musk rolled out examples of what he dubbed the Cybercab. The futuristic, metallic silver vehicles lacked steering wheels, pedals and rearview mirrors. Invited guests took short rides around the studio’s closed roads.
A lot is riding on the Cybercab for Musk, who has been selling unfulfilled promises of autonomous vehicles for years. Although Tesla’s sales of its signature electric cars stumbled early in 2024, the company has an $800-billion market capitalization built largely on the expectation that it will be able to overtake competitors to dominate the burgeoning robotaxi market. Whether Tesla is anywhere close to completing its push to develop the technology needed to do so, however, remains an open question.
On Friday, investors signaled they were skeptical of Musk’s latest claims. At 10:55 a.m Pacific time, shares of Tesla stock were trading at about $219.50, down 8% on the day.
“Investors have clearly been very excited about this for many years even though Tesla hasn’t delivered on it,” said Sam Abuelsamid, a transportation analyst at Guidehouse Insights.
“Tesla’s valuation is much higher relative to their revenues and their profits and that is almost entirely based on the presumption that they will suddenly start generating mountains of new profits,” he said.
Musk also unveiled the Robovan on Thursday night, a self-driving vehicle that can transport goods or up to 20 people. And he topped off his highly produced event with a demonstration of a humanoid robot named Optimus, several of which performed dance moves for the crowd or served drinks.
The event, which the company called “We, Robot,” made clear that Musk has ambitions for the future that go beyond transportation. Speaking to the invite-only crowd and those watching online, he conjured up a world where every family has an Optimus robot capable of doing the grocery shopping, babysitting and watering the plants. The automated labor, he said, would make goods and services less expensive and more accessible.
“It will be an age of abundance, the likes of which almost no one has envisioned,” Musk told the crowd.
While some viewed the event as a proof of concept for Musk’s robotaxi, others were far more skeptical, saying it was all show and no substance.
“Having a prototype vehicle says nothing about whether a company has developed the hardware and software necessary to safely operate that vehicle without a human driver,” said Bryant Walker Smith, an associate professor of law at the University of South Carolina who specializes in emerging transportation technology.
Testing the Cybercab on closed roads is one thing, while being able to produce one that is able to safely navigate real roads is something altogether different, Smith said.
Musk said the Cybercab would be in production no later than 2027 and would be available for purchase for about $30,000. He did not specify whether the Cybercab would rely on Tesla’s so-called Full Self-Driving technology, or FSD, which is already deployed in many Teslas on the road but is not capable of operating without a driver present.
“When we think about transport today, there’s a lot of pain that we think is normal, like having to drive around L.A. in three hours of traffic,” Musk said Thursday. “With autonomy, you get your time back,” he said.
It was a familiar promise from Musk, who has claimed repeatedly since 2014 that Tesla was nearly ready to launch fully autonomous vehicles.
Musk has come under criticism for his claims about the capabilities of FSD, which the company has been selling to customers for thousands of dollars since 2020. The tech is currently dubbed FSD Supervised because it requires an alert, human driver to be behind the wheel during operation.
“The Model S and Model X at this point can drive autonomously with greater safety than a person, right now,” Musk said in 2016, according to a clip that some say has been altered. Tesla’s self-driving feature cannot be used without someone in the driver’s seat and has been linked to several accidents, including fatal crashes.
In May, a Tesla in FSD mode nearly hit a moving train after failing to detect the locomotive. The driver hit the brakes himself and accepted responsibility for the accident, but told NBC News he believes FSD is a defective product.
“Tesla has said that a human driver needs to be more attentive, not less attentive, when using this feature,” Smith said of FSD. “Yet it is the very system that the Tesla CEO has for many years indicated would be imminently capable of automated driving.”
In addition to the robotaxi unveiled Thursday night, Musk spoke of his vision for an ad hoc taxi service, in which owners of Tesla vehicles equipped with FSD would be able to deploy them to pick up paying customers.
Musk said FSD capable of this unsupervised driving would be available to owners of Tesla’s Model 3 and Model Y vehicles in Texas and California by next year.
“I think this is a historical event, the most important that Tesla has done in the last decade,” said Dan Ives, an equity analyst at Wedbush Securities. “Many of the skeptics never thought Tesla was going to get electric vehicles on the road,” he said.
Tesla’s robotaxi business could create $10 billion to $15 billion in annual revenue for the company, Ives projected.
Tesla’s share price has risen nearly 40% over the last six months amid anticipation that the company would soon create a fleet of robotaxis and develop artificial intelligence that would enable fully autonomous driving.
Waymo, the autonomous taxi service owned by Alphabet Inc., already has self-driving cars on the road in Los Angeles and San Francisco. In both cities, Waymo vehicles are completing trips for real customers without a driver present.
Even without drivers, autonomous taxis have expenses, such as charging, cleaning and insurance, which eat into profits.
“No one has really yet figured out a business model for robotaxis,” Abuelsamid said.
Waymo cars use laser-based sensors known as Lidar to perceive the surrounding environment and make autonomous driving possible. Musk has dismissed Lidar as unnecessary and too expensive, but has so far been unable to achieve autonomous driving with alternate technology that relies instead on cameras to take in a vehicle’s surroundings.
“Elon Musk has been quite clear that he doesn’t believe that radar and Lidar are needed and that they can do it with cameras alone,” Abuelsamid said. “So far to date, no one has actually demonstrated that that is a sufficiently safe and viable solution.”
Despite optimistic investors and rising share prices in recent months, Tesla’s sales have slumped, with the company on track to record its first annual vehicle sales decline. The company delivered 462,890 vehicles in the third quarter, missing some analysts’ estimates but marking the first quarterly increase in sales this year. Tesla also slashed roughly 10% of its global workforce in April.
Increased competition in the electric vehicle space has squeezed Tesla’s sales even as the company attempts to appeal to more customers with price cuts and offers of free charging. Startup electric vehicle makers such as Rivian are offering customers other products, while traditional auto manufacturers such as Hyundai and Ford have also released lines of electric options.
Although consumers have options, concerns over driving range and charging time have contributed to faltering sales of electric vehicles in California. Electric vehicle sales are down in the state after years of growth, a trend that has hit Tesla particularly hard.
Musk has set expectations high for his company, and with the Cybercab he is trying to shed a reputation that he makes empty promises. Abuelsamid is doubtful that Tesla will actually deliver on the technology showcased Thursday night in the near future, he said.
“It’s Tesla, it’s Elon Musk, it’s obviously going to be a hype fest,” he said.
Business
U.S. Space Force awards $1.6 billion in contracts to South Bay satellite builders
The U.S. Space Force announced Friday it has awarded satellite contracts with a combined value of about $1.6 billion to Rocket Lab in Long Beach and to the Redondo Beach Space Park campus of Northrop Grumman.
The contracts by the Space Development Agency will fund the construction by each company of 18 satellites for a network in development that will provide warning of advanced threats such as hypersonic missiles.
Northrop Grumman has been awarded contracts for prior phases of the Proliferated Warfighter Space Architecture, a planned network of missile defense and communications satellites in low Earth orbit.
The contract announced Friday is valued at $764 million, and the company is now set to deliver a total of 150 satellites for the network.
The $805-million contract awarded to Rocket Lab is its largest to date. It had previously been awarded a $515 million contract to deliver 18 communications satellites for the network.
Founded in 2006 in New Zealand, the company builds satellites and provides small-satellite launch services for commercial and government customers with its Electron rocket. It moved to Long Beach in 2020 from Huntington Beach and is developing a larger rocket.
“This is more than just a contract. It’s a resounding affirmation of our evolution from simply a trusted launch provider to a leading vertically integrated space prime contractor,” said Rocket Labs founder and chief executive Peter Beck in online remarks.
The company said it could eventually earn up to $1 billion due to the contract by supplying components to other builders of the satellite network.
Also awarded contracts announced Friday were a Lockheed Martin group in Sunnyvalle, Calif., and L3Harris Technologies of Fort Wayne, Ind. Those contracts for 36 satellites were valued at nearly $2 billion.
Gurpartap “GP” Sandhoo, acting director of the Space Development Agency, said the contracts awarded “will achieve near-continuous global coverage for missile warning and tracking” in addition to other capabilities.
Northrop Grumman said the missiles are being built to respond to the rise of hypersonic missiles, which maneuver in flight and require infrared tracking and speedy data transmission to protect U.S. troops.
Beck said that the contracts reflects Rocket Labs growth into an “industry disruptor” and growing space prime contractor.
Business
California-based company recalls thousands of cases of salad dressing over ‘foreign objects’
A California food manufacturer is recalling thousands of cases of salad dressing distributed to major retailers over potential contamination from “foreign objects.”
The company, Irvine-based Ventura Foods, recalled 3,556 cases of the dressing that could be contaminated by “black plastic planting material” in the granulated onion used, according to an alert issued by the U.S. Food and Drug Administration.
Ventura Foods voluntarily initiated the recall of the product, which was sold at Costco, Publix and several other retailers across 27 states, according to the FDA.
None of the 42 locations where the product was sold were in California.
Ventura Foods said it issued the recall after one of its ingredient suppliers recalled a batch of onion granules that the company had used n some of its dressings.
“Upon receiving notice of the supplier’s recall, we acted with urgency to remove all potentially impacted product from the marketplace. This includes urging our customers, their distributors and retailers to review their inventory, segregate and stop the further sale and distribution of any products subject to the recall,” said company spokesperson Eniko Bolivar-Murphy in an emailed statement. “The safety of our products is and will always be our top priority.”
The FDA issued its initial recall alert in early November. Costco also alerted customers at that time, noting that customers could return the products to stores for a full refund. The affected products had sell-by dates between Oct. 17 and Nov. 9.
The company recalled the following types of salad dressing:
- Creamy Poblano Avocado Ranch Dressing and Dip
- Ventura Caesar Dressing
- Pepper Mill Regal Caesar Dressing
- Pepper Mill Creamy Caesar Dressing
- Caesar Dressing served at Costco Service Deli
- Caesar Dressing served at Costco Food Court
- Hidden Valley, Buttermilk Ranch
Business
They graduated from Stanford. Due to AI, they can’t find a job
A Stanford software engineering degree used to be a golden ticket. Artificial intelligence has devalued it to bronze, recent graduates say.
The elite students are shocked by the lack of job offers as they finish studies at what is often ranked as the top university in America.
When they were freshmen, ChatGPT hadn’t yet been released upon the world. Today, AI can code better than most humans.
Top tech companies just don’t need as many fresh graduates.
“Stanford computer science graduates are struggling to find entry-level jobs” with the most prominent tech brands, said Jan Liphardt, associate professor of bioengineering at Stanford University. “I think that’s crazy.”
While the rapidly advancing coding capabilities of generative AI have made experienced engineers more productive, they have also hobbled the job prospects of early-career software engineers.
Stanford students describe a suddenly skewed job market, where just a small slice of graduates — those considered “cracked engineers” who already have thick resumes building products and doing research — are getting the few good jobs, leaving everyone else to fight for scraps.
“There’s definitely a very dreary mood on campus,” said a recent computer science graduate who asked not to be named so they could speak freely. “People [who are] job hunting are very stressed out, and it’s very hard for them to actually secure jobs.”
The shake-up is being felt across California colleges, including UC Berkeley, USC and others. The job search has been even tougher for those with less prestigious degrees.
Eylul Akgul graduated last year with a degree in computer science from Loyola Marymount University. She wasn’t getting offers, so she went home to Turkey and got some experience at a startup. In May, she returned to the U.S., and still, she was “ghosted” by hundreds of employers.
“The industry for programmers is getting very oversaturated,” Akgul said.
The engineers’ most significant competitor is getting stronger by the day. When ChatGPT launched in 2022, it could only code for 30 seconds at a time. Today’s AI agents can code for hours, and do basic programming faster with fewer mistakes.
Data suggests that even though AI startups like OpenAI and Anthropic are hiring many people, it is not offsetting the decline in hiring elsewhere. Employment for specific groups, such as early-career software developers between the ages of 22 and 25 has declined by nearly 20% from its peak in late 2022, according to a Stanford study.
It wasn’t just software engineers, but also customer service and accounting jobs that were highly exposed to competition from AI. The Stanford study estimated that entry-level hiring for AI-exposed jobs declined 13% relative to less-exposed jobs such as nursing.
In the Los Angeles region, another study estimated that close to 200,000 jobs are exposed. Around 40% of tasks done by call center workers, editors and personal finance experts could be automated and done by AI, according to an AI Exposure Index curated by resume builder MyPerfectResume.
Many tech startups and titans have not been shy about broadcasting that they are cutting back on hiring plans as AI allows them to do more programming with fewer people.
Anthropic Chief Executive Dario Amodei said that 70% to 90% of the code for some products at his company is written by his company’s AI, called Claude. In May, he predicted that AI’s capabilities will increase until close to 50% of all entry-level white-collar jobs might be wiped out in five years.
A common sentiment from hiring managers is that where they previously needed ten engineers, they now only need “two skilled engineers and one of these LLM-based agents,” which can be just as productive, said Nenad Medvidović, a computer science professor at the University of Southern California.
“We don’t need the junior developers anymore,” said Amr Awadallah, CEO of Vectara, a Palo Alto-based AI startup. “The AI now can code better than the average junior developer that comes out of the best schools out there.”
To be sure, AI is still a long way from causing the extinction of software engineers. As AI handles structured, repetitive tasks, human engineers’ jobs are shifting toward oversight.
Today’s AIs are powerful but “jagged,” meaning they can excel at certain math problems yet still fail basic logic tests and aren’t consistent. One study found that AI tools made experienced developers 19% slower at work, as they spent more time reviewing code and fixing errors.
Students should focus on learning how to manage and check the work of AI as well as getting experience working with it, said John David N. Dionisio, a computer science professor at LMU.
Stanford students say they are arriving at the job market and finding a split in the road; capable AI engineers can find jobs, but basic, old-school computer science jobs are disappearing.
As they hit this surprise speed bump, some students are lowering their standards and joining companies they wouldn’t have considered before. Some are creating their own startups. A large group of frustrated grads are deciding to continue their studies to beef up their resumes and add more skills needed to compete with AI.
“If you look at the enrollment numbers in the past two years, they’ve skyrocketed for people wanting to do a fifth-year master’s,” the Stanford graduate said. “It’s a whole other year, a whole other cycle to do recruiting. I would say, half of my friends are still on campus doing their fifth-year master’s.”
After four months of searching, LMU graduate Akgul finally landed a technical lead job at a software consultancy in Los Angeles. At her new job, she uses AI coding tools, but she feels like she has to do the work of three developers.
Universities and students will have to rethink their curricula and majors to ensure that their four years of study prepare them for a world with AI.
“That’s been a dramatic reversal from three years ago, when all of my undergraduate mentees found great jobs at the companies around us,” Stanford’s Liphardt said. “That has changed.”
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