As SaaS companies became some of the most sought-after investments in technology, valuations rose accordingly. High gross margins, rapid revenue growth, and an inherently scalable business model helped push valuations to 16.5 times forward revenue back in 2021.

And within B2B software, one position was particularly coveted: the system of record.

A system of record stores and governs a company’s critical data—its accounting, transaction, customer, or employee records. Depending on the business function, that role typically belongs to an enterprise resource planning (ERP), customer relationship management (CRM), or human resources platform.

The defining characteristics are straightforward: an authoritative source of trusted data, tightly controlled access and editing permissions, and integrations that allow other applications to read, update, or synchronize information.

In the SaaS era, becoming the system of record was the ultimate ambition for many software companies. Own the system of record, and you owned the foundation on which a company’s workflows depended.

Other applications integrated with you. Processes were built around you. Employees were trained to use you.

The result was a deep, defensible moat—and the attractive economics that came with it.

Once hundreds of workflows and applications depended on that foundation, replacing it became an enormous undertaking. It meant migrating critical data, rebuilding integrations, redesigning processes, and retraining employees. For many customers, the cost and disruption simply weren’t worth it.

But what happens when AI changes both how software is built and how people use it?

Software development is becoming more accessible. Customers can increasingly “vibe code” their own applications, while entrepreneurs can more easily build products that challenge incumbents.

That raises a fundamental question: If owning the system of record created the moat in SaaS, what creates an equally defensible position in the AI era?

We believe we’re moving toward a future in which employees no longer need to log in to a collection of SaaS applications to get their work done. No more constant toggling between browser tabs. No more manually moving information from one disconnected system to another.

In our travels, we’ve seen employees juggling seven open browser tabs, repeatedly copying and pasting data between applications that don’t communicate with one another.

The employee has effectively become the integration layer.

Agentic AI offers a different model.

Rather than opening multiple dashboards to retrieve information, update records, or initiate workflows, employees will use a single, simpler interface to tell an agent what they need. The agent will then interact with the underlying systems through APIs (or the equivalent), accessing their data and business logic directly.

The question is no longer just whether SaaS applications will incorporate AI. It’s whether employees will need to open those applications at all.

For many routine workflows, the dashboard could become a legacy interface rather than the primary place where work happens. The underlying data and business logic would remain essential. The traditional front-end experience might not.

It’s an exciting possibility: separating the systems that store data and run business processes from the interface employees use to get things done.

For automotive dealers, the stakes are significant. Dealer management systems (DMS) and CRMs—the dealership’s core systems of record—together account for almost half of current dealer SaaS spending, as the accompanying chart illustrates.

Will that revenue become more or less defensible as fewer users interact with those systems directly?

Businesses will still need assurances that their data is available, secure, and accurate. They will still need trusted records, access controls, and reliable business logic. Those requirements don’t disappear simply because an AI agent becomes the interface.

But the systems that store the data may no longer own the user experience.

That distinction could have profound implications for their competitive position, pricing power, and ability to deliver and capture value. A system of record might remain indispensable to a business while losing some of the influence that came from being the place where employees spent their working day.

In the SaaS era, the prize was owning the record.

In the AI era, will the prize be owning the work?

Until next week,

Steve Greenfield
General Partner
Automotive Ventures

Back in July, a new chain of gas stations called the Freedom Fuel Network popped up in the Northeast, seemingly out of nowhere, with extremely attractive prices. It seemed to have friends in high places right from the very start, with its first retail site promoted by The White House’s official X account, and President Donald Trump lauding the company for “stepping up” as “a VERY smart Retailer.” The federal government denied that it was subsidizing Freedom Fuel or involved with the company on any level, so, naturally, people wondered how it managed to swoop in with gas 30 cents per gallon below the national average. A new lawsuit purports to have the answer to that question: The gas was stolen. That’s the claim from the Mansfield Oil Company of Gainesville, Georgia, which has sued New Jersey-based distributor KRSM for allegedly neglecting to pay it for 1.1 million gallons of fuel, valued at $4 million. KRSM then allegedly turned around and sold some of that gas to Freedom Fuel at a discount, which it would’ve been able to do, per the suit, because it never paid Mansfield for it in the first place. That’s the plaintiff’s explanation for why Freedom’s product was indeed so cheap. | The Drive

When Volkswagen Chief Executive Oliver Blume took a cost-cutting plan to his board this summer that envisioned a doubling of job losses to 100,000, he was fully aware it would be rejected. Such is the predicament of running Germany’s premier industrial company, where half the supervisory-board directors are worker representatives and swing votes are held by the local government. Now Blume is considering an audacious workaround, according to people familiar with his plans. If the board factions can’t come to an agreement at a meeting set to take place on Friday, he could go hostile—bypassing the board like an activist investor or corporate raider by taking the plan directly to shareholders. It’s a nuclear option, a move without precedent at Volkswagen or the broader German corporate scene, where for years stakeholder capitalism has meant that decisions are driven by consensus among workers, regulators and shareholders. The stakes are enormous. Chinese automakers are moving headlong onto German carmakers’ home turf after dethroning them in China, previously their strongest overseas market. Higher U.S. tariffs under President Trump and a bumpy transition to electric vehicles and hybrids have cost automakers billions of dollars. | The Wall Street Journal ($)

Japan's Honda aims to cut more than $9 billion in ​costs over the next four years and has instructed suppliers to drastically reduce their prices, according to internal documents and one person familiar with ‌the matter. The plan, reported here for the first time, is one of the most striking examples yet of how Japanese automakers are scrambling to deal with intensifying competition from China. BYD and other Chinese electric vehicle (EV) makers are capturing sizeable market share in Southeast Asia, Latin America and Europe, powered by advanced software and battery technology — and prices that are by far the industry's lowest. Honda, the world's ​largest motorcycle manufacturer, is trying to fix its struggling car business. It expects EV-related losses to ultimately total more than $12 billion, one of the biggest hits ​among global automakers, and is now shifting its focus to gasoline-electric hybrids. In May it reported its first-ever annual loss as ⁠a publicly traded company. | Reuters ($)

Hyundai confirmed plans for an international expansion of its Amazon Autos program “as early as 2027,” the company announced during its CEO Investor Day on Wednesday. Hyundai CEO Jose Muñoz said that Amazon Autos covers 80% U.S. market via dealer enrollment, with used and CPO vehicles now available, and that 78% of those buyers are new to the Hyundai brand. “Our partnership with Amazon continues to expand, as well,” said Muñoz. “Together with Amazon Web Services (AWS), we are scaling our AI work across software, autonomy and robotics.” The CEO and a corresponding presentation deck also referred to potential collaboration across optimized logistics, alternative energy, and new customer experiences. | Wards Auto

Experian Automotive has published the Q2 2026 Automotive Market Trends Report. | Experian

Thousands of drivers have filed complaints with U.S. auto-safety regulators describing jarring incidents in which their sunroof unexpectedly exploded or shattered, often while they were driving. The number of complaints has soared recently and is set to hit a record in 2026, with nearly 500 reported so far this year. The causes of these failures are similarly widespread. Road debris that drivers don’t notice is one culprit, car designers and testers say. Hot temperatures and rapid temperature shifts can cause rapid expansions of the glass. Sometimes, design and manufacturing defects are to blame. The sunroof failure reports target all major automakers, including 17 different manufacturers and more than 200 models over the past three years, according to The Wall Street Journal analysis. Roughly one-in-five complaints lodged in that time involved 2025 or 2026 model year vehicles, the analysis showed. Such failures happen roughly once a day. | The Wall Street Journal ($)

The Texas governor, Greg Abbott, directed police departments last week to stop spending state money on Flock Safety cameras, the license-plate readers that have drawn bipartisan backlash around the country. Days later in Florida, Gov. Ron DeSantis’s administration ordered the systems removed from state roads. Mr. DeSantis has described the surveillance technology as “out of control.” Both governors are tough-on-crime Republicans with deep backing from law enforcement agencies. Yet their moves underscore how the political winds are shifting against Flock and other plate-reading systems that have been embraced by police departments. The cameras, which began rapidly appearing by the tens of thousands on American roads in recent years, track vehicles and feed surveillance databases. The networks of cameras can be used to assist officers by quickly locating vehicles connected with crimes. But concerns about a sweeping system of government surveillance and about abuses by individual officers have brought mounting opposition. | The New York Times ($)

Florida banned local police from installing license-plate readers on state roads, responding to growing concern about the proliferation of surveillance cameras made by Flock Safety and other companies. The Florida Department of Transportation on Monday revoked all permits for local law-enforcement agencies to operate license-plate reader systems, ordering any that have been installed removed from state roadways within 30 days. The department said in a memo that use of the devices had seen an exponential increase, and that “concerning reports of misuse, data privacy concerns, and surveillance schemes merit immediate action to preserve Floridians’ sovereignty and quality of life.” Governor Ron DeSantis urged the state legislature to consider restrictions on Flock cameras so Florida won’t “turn into some type of digital prison.” DeSantis has emerged as a leading critic of the tech industry among Republicans, this year enacting far-reaching regulations on AI data centers in the state. “What we don’t want in the state of Florida is to have a digital, AI surveillance state where everything we’re doing is being tracked at all times,” DeSantis said at a news conference in Jacksonville on Monday. | Bloomberg ($)

Scientists have long studied elite athletes as a way to understand the inner workings of the human brain. But Formula 1 drivers offer them a unique window: how the brain adapts to impossible speeds. The first thing to know is that while reflexes are important, they are not what distinguishes a truly elite driver. “This is something that people don’t realize when they think of racing drivers living off their reflexes,” said Otto Lappi, a senior university lecturer at the University of Helsinki in Finland, who studies eye movements of various types of athletes. “Most of their skill is anticipation. The anticipation is how the brain buys itself time.” In other words, a great driver doesn’t react to the road, he predicts it. In many ways, this isn’t surprising because the entire brain is often said to be an elaborate prediction machine. But in Formula 1 drivers, this looks a little different. | The New York Times ($)

The luxury lanes of London have a pesky problem: foreign supercars that park where they see fit, racking up tickets the drivers don’t pay. London’s priciest neighborhoods are showcases for ostentatious automobiles at all times of year, V12 engines roaring through streets where speed limits top out at 20 miles-per-hour. The neighborhoods become particularly clogged with Ferraris, Lamborghinis and McLarens bearing Middle East plates in the summer, as their drivers escape the Gulf’s scorching heat. Underground parking garages are scant in London’s gilded precincts. Capacious Rolls-Royces and Bentleys rub bumpers with plebeian Honda Civics and Fiats, all seeking streetside spaces. When parking spots are scarce, supercar drivers often take to loading zones, bus stops and other spaces denoted with double yellow lines—the British marker of “no parking.” | The Wall Street Journal ($)

Electric vehicle batteries are lasting longer than previously feared by drivers, with most used EVs able to retain about 90 percent of their original usable battery capacity after 150,000 kilometres, a new study has shown. Despite a surge in global EV sales on the back of rising fuel prices, long-term battery durability continues to be one of the key concerns for drivers when they consider switching from a petrol model to an electric car. EV battery warranties typically cover eight years or 100,000 miles (160,000km) with car manufacturers required under the warranty to provide a replacement battery if capacity falls below 70 percent. According to the latest study published by AVILOO Battery Diagnostics, an Austria-based group that analyses battery health, the median state of health (SoH) — which represents the remaining percentage of a battery’s original usable capacity — for 20 popular EV models stood between 87 percent and 94 percent after 150,000km. The median SoH was between 91 and 97 percent after 50,000km, and 88 and 95 percent after 100,000km. The study was based on more than 500,000 tests Aviloo carried out globally on the 20 EV models including Tesla’s Model Y and Volkswagen’s ID.4 between 2022 and 2026. | Financial Times ($)

U.S. consumers will never be able to purchase Chinese vehicles. That’s the hope of the U.S. auto industry as well as the U.S. military and intelligence establishment. And it’s the goal of two senators who represent states with a heavy industry presence: Bernie Moreno, Republican of Ohio, and Elissa Slotkin, Democrat of Michigan, who have sponsored a bill to permanently ban internet-connected vehicles from China from being sold in this country. (For good measure, it lumps in cars from Iran, North Korea and Russia.) An existing 100 percent tariff and 2027 U.S. Department of Commerce restrictions on connected vehicles from China make it impractical to import Chinese vehicles today. As a result, Polestar, owned by GEELY, will stop selling vehicles here in 2027. The Senate bill, which has bipartisan support and has been unanimously voted out of committee, would codify that exclusion. And it’s wide-ranging: Under the terms of the Connected Vehicle Security Act of 2026, any vehicle manufacturer that is more than 15 percent owned by a Chinese company would not be able to sell cars in the United States. Chinese software would be banned next year, and hardware in 2030.| The New York Times ($)

A group representing major automakers on Thursday urged Congress to pass ​legislation permanently barring Chinese vehicles from the U.S. market before the end of the year. The Alliance for Automotive Innovation, which represents General Motors, Ford, Toyota, Volkswagen, Hyundai, Honda, Stellantis and other major automakers, called for quick action. "Right now, Chinese automakers are dumping subsidized vehicles with connected software and hardware around the world," the group's CEO John Bozzella wrote Congress in a letter seen ​by Reuters. "This hasn’t happened inside the U.S. yet, but given the scale and urgency of this threat, we ​urge you to enact a Chinese vehicle, software and hardware ban before adjourning this year and ⁠make this policy the law of the land." In July, the Senate Commerce Committee approved legislation to toughen a government ​ban on Chinese automakers entering the American market, but it still faces hurdles to winning final passage. | Reuters ($)

Chinese automakers' rapid development speeds are facing scrutiny from regulators over safety and testing concerns. Regulators are launching a yearlong campaign that includes surprise inspections at carmakers to address concerns that quality could deteriorate in the pursuit of speed. The use of artificial intelligence could set a new industry standard of just 18 months for bringing a brand new model to market, but regulators are pushing for stronger validation of safety-critical hardware and new technologies. | Bloomberg ($)

China imported just four battery-electric passenger cars per day in July, the sharpest decline yet in a market that once relied heavily on European luxury EVs. The 125 vehicles that crossed the border in July represent a 99 percent drop from the 2023 peak, as China’s booming domestic production makes imports virtually obsolete. | Automotive News ($)

Chinese regulators on Tuesday issued new guidelines for automakers' overseas operations, ​calling on companies to comply with laws governing ‌outbound investment and overseas business activities, while strengthening anti-monopoly, anti-corruption and social responsibility compliance. The guidelines follow a rapid global expansion ​by Chinese automakers, led by BYD, as intensifying ​competition at home pushes manufacturers to seek growth ⁠abroad. The rules call on automakers to base pricing on ​costs and market conditions, avoid using prices to gain unfair ​competitive advantages, and refrain from frequent or steep price changes that could harm consumers or brand image. Companies are also required ​to provide truthful marketing disclosures, avoid misleading advertising, and ​protect the reputation of Chinese auto brands abroad. The guidelines also urge ‌firms ⁠to strengthen antitrust compliance, prevent disruptive competition, ensure exported products meet local market needs, comply with local labour laws, and improve risk management covering political, economic and ​safety conditions in ​host countries. China ⁠exported 8.32 million vehicles in 2025 to more than 200 countries and regions, while ​Chinese companies have invested in auto manufacturing ​projects in ⁠over 80 markets, according to official data. | Reuters ($)

Canada opened the door Sept. 1 to another 24,500 China-made electrified vehicles as its import quota reset and the new trade policy began its seventh month. The fresh allotment comes as Chinese automakers build a more visible presence in Canada and inch closer to launching sales. Ottawa installed the quota for imports as part of a trade deal with Beijing in January, replacing an inhibitive 100-per-cent tariff in place since 2024. It will allow 49,000 China-made EVs into Canada in its first year, but the government divided the 12-month period in half, making 24,500 import permits available March 1, followed by the remainder Sept. 1. Chinese EVs that enter Canada within the quota are still subject to Canada’s normal 6.1 per cent most-favoured-nation tariff. Global Affairs Canada | Affaires mondiales Canada issued quota for 15,344 China-made EVs and 259 hybrids, during the import system’s first six months, according to the most recent accounting Aug. 28. | Automotive News ($)

Hundreds of millions of blue-collar workers were the backbone of China’s astounding economic rise through the 1990s and 2000s, enabling the country to post year after year of double-digit economic growth. Those workers are now being left behind. Blue-collar laborers, in interviews with The Washington Post, described a shift precipitated by many factors: a top-down decision to automate Chinese manufacturing, the offshoring of many jobs to countries with even cheaper labor and a sharp falloff in demand for construction workers amid a years-long real estate crisis. The Chinese economy, once powered by low-cost labor, has become highly unbalanced, with aggressive high-tech innovation masking deep domestic pain for the ordinary workers — many drawn from rural, impoverished villages in the countryside — who built the world’s second largest economy. The hollowing out of the blue-collar class and rise of China’s technological prowess has led to a striking statistic: Under the rule of the Communist Party, according to some measures, income inequality is greater in China than the United States. The high levels of inequality and unemployment are contributing to the view among some analysts and experts that China will never surpass the United States as the world’s largest economy by nominal GDP. | The Washington Post ($)

Signs of a new era of de-globalisation are hard to spot in Taiwan, where the economy grew by an astonishing 13 per cent in the last quarter. That would be extraordinary in an emerging economy, let alone an advanced one, and shows how demand driven by the global AI boom is rushing through east Asia’s exporters. This surge is doubly surprising, given President Donald Trump’s volley of tariffs and broader talk of a fracturing of international commerce. Yet this is a rupture visible almost everywhere except global trade figures, which keep showing reliable growth. This story of resilience lies behind Ed Conway’s Trade World. “The death of globalisation has been declared many times in the past few years, but a glance at the data shows nothing of the sort has happened,” he writes. “On the contrary, the volume of goods being carried around the world keeps rising.” | Financial Times ($)

In July and August, Washington tightened restrictions on foreign-made advanced robotic systems and imposed steep tariffs on imported drones and their components, both moves citing national-security concerns. The drone tariffs take effect in September, with additional component tariffs following in 2027. These moves are part of a broader U.S. effort to restrict foreign technology in strategically important industries. The FCC’s Covered List, established in 2021, initially targeted telecommunications and surveillance equipment from companies including Huawei, ZTE Corporation and Hikvision before expanding to foreign-made drones and, most recently, to advanced robotic devices. The latest move comes as Chinese manufacturers have built commanding positions in both drones and humanoid robots, often competing at prices U.S. and European rivals struggle to match. Taken together, the restrictions are raising a bigger question for the global robotics industry: If Chinese drones and humanoids are increasingly shut out of the U.S., where does the competition move next? The restrictions may protect parts of the American market, but they don’t directly address China’s global manufacturing scale and cost advantages. | TechCrunch ($)

Hyundai is building a “data flywheel” to enhance its software-defined vehicle capabilities, in which it will continuously collect and analyze data from its global fleet to deliver over-the-air updates, including improved autonomous driving capabilities and infotainment experiences, the automaker announced at its 2026 CEO Investor Day presentation on Aug. 26. The automaker will then apply its data flywheel to improve its vehicles’ autonomous driving capabilities. Data collection will begin with Hyundai’s flagship Grandeur sedan in the South Korea market equipped with the automaker’s Pleos Connect infotainment system and Gleo AI, its new generative AI in-vehicle assistant. | Wards Auto

Nissan and Honda have agreed to jointly develop key systems and software that form the core of next-generation vehicles, after a planned merger fell through last year. The Japanese automakers said Monday that they signed a joint development agreement and aim to adopt the architecture incorporating the jointly developed systems and software in their vehicles from the fiscal year starting in April 2029. By standardizing these technologies, Nissan and Honda aim to leverage their combined engineering expertise and resources to improve competitiveness through reduced development costs and greater economies of scale, the two companies said. Software, which is crucial to vehicle intelligence and electrification, has been identified as an important area of collaboration, given the rapid pace of technological innovation, they said. The agreement came after the companies said they would study ways to collaborate on electric vehicles, their core parts and software more than two years ago. The automakers will continue to explore opportunities for collaboration in other areas as part of their strategic partnership, they said. | The Wall Street Journal ($)

Uber is aligning itself with drivers’ unions in a bid to slow the rollout of robotaxis, finding unlikely bedfellows as it faces fierce competition on self-driving technology from rivals such as Alphabet-owned Waymo. The ride-hailing group that became notorious in its early years for skirting regulation and aggressively lobbying against worker protections has recently joined unions in pushing to limit the rollout of self-driving taxis in locations such as New Jersey and Washington DC. Across the U.S., Uber has argued for a slower deployment of autonomous vehicles to ease the transition for drivers — and pushed for rules requiring ride-hailing platforms to have “hybrid networks” that combine self-driving cars with human drivers. Its position marks a remarkable shift for a company once emblematic of how Silicon Valley overlooked worker protections in the name of innovation, but which now finds itself facing technological disruption of its own core business. | Financial Times ($)

For more than a decade, Uber built one of the most valuable transportation platforms in the world by redefining labor as software-mediated flexibility. Drivers supplied the vehicles, absorbed the depreciation, paid for fuel, maintenance, insurance, financing, downtime, and risk, while the tech platform did the coordination. But now, as autonomous vehicles begin to mature commercially, even as it continues to do business with many AV companies, Uber has repositioned itself as a defender of drivers and equitable mobility, with stated concerns about the impact of automation on workers. This narrative deserves scrutiny. Uber’s recent white paper, “Unlocking the Promise of Autonomy,” presents the company as a pragmatic middle ground between rapid automation and social responsibility. The report argues for a “hybrid” transportation future where human drivers and autonomous vehicles coexist and warns against a future in which robotaxis create unequal systems of mobility. But the argument is difficult to separate from Uber’s own strategic vulnerability and efforts to slow Waymo and Tesla, as signaled by their recent divorce from the company in Phoenix. Research showing that 55% of AV rides come directly from people who otherwise would have taken a rideshare trip indicates that efforts to slow down automation may be more about platform preservation than social good. | The Driverless Digest

Waymo argued last week that fully autonomous vehicles are not possible without using a mix of sensors, and that “pure end-to-end” AI systems are not safe enough — shots at Tesla, despite the Alphabet-owned company not naming names. The company took these swings in a blog post and an interview with Axios just one week ahead of a September 3 event where Tesla is expected to formally introduce its two-seater Cybercab into its own small-but-growing robotaxi fleet. Waymo also announced three new markets on Tuesday morning, further extending its robotaxi network, which is serving customers in more than a dozen U.S. cities. Despite being technical and a bit wonky, Waymo’s claims kicked off a social media fight that lasted all weekend. | TechCrunch ($)

Waymo is accelerating its nationwide expansion with cheaper, next-generation robotaxis — thousands of which are built in China and could eventually run afoul of tightening U.S. restrictions. The Alphabet subsidiary is betting its next phase of growth on cheaper robotaxis built for massive scale — just as Washington could move the goalposts on where those vehicles can come from. The Ojai is based on a stripped-down vehicle manufactured by Zeekr, a brand owned by China's Geely Holding Group and subject to huge tariffs. The Ojai could become problematic for Waymo as the U.S. government tightens technology import restrictions to protect national security. A current U.S. Department of Commerce rule restricts Chinese software and hardware in connected vehicles, including automated-driving software. Waymo says it complies because Zeekr is supplying only the basic vehicle, while Waymo installs its own autonomous-driving and connectivity technology in Arizona. | Axios

Elon Musk first revealed the Cybercab in 2024 at a Hollywood movie lot. But the idea has been around far longer. Musk has spent more than a decade promising that Tesla would find a way to make its cars fully autonomous, paving the way for a network of robotaxis. He even went so far as to claim, in 2016, that every Tesla being made had the capability to become fully autonomous and that the cars only needed the right software update to make it happen. He was wrong. Tesla has reworked the hardware in its cars multiple times since that declaration, and Musk recently admitted that millions of them will need some kind of hardware retrofit to become autonomous. Still, Tesla kept developing driving automation software. It has steadily released and refined its primary offering, Full Self-Driving (Supervised). But as capable as that software has become, it is still driver-assistance software. The responsibility and liability remain with the driver. The Cybercab is supposed to change all that. It emerged from an effort by Tesla to develop a next-generation EV platform that was cheaper to build. | TechCrunch ($)

Tesla published a form on Thursday for businesses interested in buying Cybercab fleets or providing infrastructure for its network, the latest sign that the company’s aspirations for its gold-hued autonomous vehicle stretch beyond being a robotaxi operator. The robotaxi interest form, which was released ahead of the company’s Cybercab event in Austin, is not definitive proof that Tesla will sell its autonomous vehicles to third-party operators. But it’s certainly an indicator of where the company’s longer-term plans lie. Tesla wants to scale and it doesn’t seem to want to do it alone. Tesla CEO Elon Musk has talked often, and for years, about building a massive fleet of low-cost robotaxis. But in the early days, those dreams centered on personally owned Tesla vehicles. As early as 2016, Musk spoke publicly about a future in which Tesla owners, equipped with self-driving software, would be able to earn money by renting out their vehicles. He stuck with that Tesla network idea for years, noting at the company’s Autonomy Day in 2019 that it would allow owners to add their autonomous vehicles to its ride-sharing app, similar to how Uber’s business model works. | TechCrunch ($)

Believe it or not, the Tesla Cybercab is coming. Nearly two years after Elon Musk first unveiled the gold-tinted, gull-wing-door sporting, steering-wheel-free, two-seaters as the future of Tesla’s autonomy efforts, the company is finally putting them into operation as part of its robotaxi service in Austin, Texas. Public rides are here, and as Musk fans will assert, the era of Tesla’s robotaxi dominance will begin. Or will it? Musk has bet his company — and his trillion-dollar pay package — on a stripped down, barebones autonomous driving system that eschews multiple sensors used by all of his rivals in favor of a camera-only approach. The Cybercab, as a purpose-built autonomous vehicle without traditional controls, embodies this bet. Musk believes he can forge his own path to robotaxi success — and the Cybercab is his gilded vehicle of choice. We’ll soon know if he’s in for a crash. The Cybercab will be using a modified version of Tesla’s Full Self-Driving (FSD). For the company’s millions of vehicle owners, FSD remains a Level 2 driver assist feature that requires human supervision. In the Cybercab, it will be monitored by remote operators who theoretically can step in if there’s a problem. FSD and Autopilot have been linked to dozens of fatalities and thousands of crashes. Using only cameras and an AI-powered neural net, the Cybercab will need to navigate a complex, unpredictable environment. Without conventional controls, there will be no human fallback in case the autonomous system fails. And after years of blaming crashes on their drivers, Tesla will now bear full legal responsibility if something goes awry. | The Verge ($)

Federal regulators have opened an investigation into whether Tesla’s new Cybercab model is compliant with safety regulations, a potentially big obstacle to the company’s plans to offer paid rides in the driverless vehicles. The investigation by the National Highway Traffic Safety Administration (NHTSA) began Thursday, according to a document posted on the agency’s website, the same day that Tesla displayed dozens of Cybercabs in Austin, Texas, near the factory where they are produced. Tesla has indicated that it plans to offer paid rides in the Cybercabs, which do not have steering wheels, brake pedals or side and rearview mirrors. The company has also invited inquiries from people interested in buying fleets of Cybercabs. The car is not yet available to be purchased by individuals. The Cybercab is central to plans by Elon Musk, Tesla’s chief executive, to revolutionize transportation and dominate the growing market for vehicles capable of acting as robot chauffeurs. Tesla’s $1.4 trillion stock market valuation depends in large part on the success of its taxi service. | The New York Times ($)

London’s streets are difficult to navigate for even the most savvy of drivers. The city’s medieval layout is a dense maze filled with cars, buses, delivery scooters, bikers and jaywalking pedestrians. There are roundabouts upon roundabouts. Restricted bus lanes emerge and disappear again. On one-lane streets, drivers traveling in opposite directions intersect and must coordinate in an unspoken language to get through. The failure rate for a driver’s license test in London is just over 50 percent. This week, a small number of autonomous robotaxis will enter the fray, carrying London passengers for the first time. Fifteen cars operated by Uber and the British autonomous vehicle start-up Wayve will be available for ride-hailing through Uber’s app as part of a safety testing period. The cars will have a safety driver present to take over if needed, as government regulators weigh eventually approving wider deployments. The technology’s arrival in one of the world’s largest and most iconic cities is an important step for the autonomous vehicle industry. Driverless cars are already common sights in cities like San Francisco, Beijing and Abu Dhabi, but acceptance has been slower in European cities, where the driving environment can be complex and regulation is stiff. | The New York Times ($)

Waymo expanded its robotaxi service to three new cities on Tuesday, marking a new phase in its ongoing, aggressive expansion phase. Select riders will now be able to hail fully autonomous Waymos without safety drivers in Denver, San Diego, and Tampa, Florida, the company says. The big news isn't the expansion—it's the new challenge that Waymo is taking on. All Waymo deployments thus far have been in cities that do not or rarely experience snow. Nashville, Tennessee, is the coldest, and it gets less than 5.0 inches of snowfall in an average year. Denver gets far more. It receives around 56 inches of snow per year on average, according to the National Weather Service. Waymo's announcement did not explicitly say whether the robotaxis would operate in snowy weather. The company can and does pause operations during severe weather events, like heavy storms in Miami or dust storms in Arizona. | Inside EVs

“Physical AI” is a concept that encompasses everything from humanoid robot workers to automated “smart factories” that can adapt their own operations in real time. The promise of physical AI is feeding hopes in Washington that America’s supremacy in tech will ride to the rescue of a manufacturing sector long in decline, spurring a revival in the country’s competitiveness. “The only way the US is going to regain its role in manufacturing is by applying AI more effectively than China,” says Chris Miller, an economic historian at Tufts University. A particular focus for the Pentagon is its potential to revitalise the U.S. defence industrial base, which is struggling to expand production amid a severe shortage of munitions and intensifying competition from China. Leading defence contractors under pressure from AI-savvy rivals like Anduril Industries and Palantir Technologies are rushing to embed physical AI in their factories, while defence-focused start-ups offer everything from 3D printing of composite materials to gecko-like robots used to inspect the hulls of submarines. But labour unions worry the trend could have a devastating impact on blue-collar workers, as the most valuable tasks are automated and the fruits of productivity gains are absorbed by shareholders. “Dangerous, de-skilling and harmful uses of AI are occurring with too much frequency,” says Edward Wytkind, senior adviser to the American Federation of Labor and Congress of Industrial Organizations’ Tech Institute. “We must ensure that workers, not billionaire tech companies or investors, determine the future of jobs in the U.S. and around the world.” | Financial Times ($)

Exoskeletons are a staple of science-fiction films, from “Aliens” to “Avatar”. In reality, full-body versions like those on screen have disappointed. A decade ago the American army was developing two of them, together with a third for just the legs and hips. All have been abandoned. But modest exoskeletons are proving surprisingly useful—and not just to the injured and disabled. At €9,995 ($11,423), for example, Ironhand is hardly cheap. Yet since Skelex, a Dutch firm, began selling the device in 2024, it has been put to work by about 200 companies around the world. Advances in batteries, actuators and software have played a role. But, paradoxically, the biggest leap forward, says Karl Zelik, an exoskeleton expert at Vanderbilt University in Nashville, was restraint. The industry stopped chasing “Hollywood, do-it-all” designs. Instead, today’s lighter, more comfortable exoskeletons focus on assisting a single part of the body to perform tasks ranging from fixing roofs to gathering crops. The most familiar use is to permit movement by people with disabilities. Lifeward, an Israeli firm, sells ReWalk, a leg exoskeleton that allows some people with spinal-cord injuries to stand up, walk and even climb stairs—typically with help from crutches. After selecting a suitable mode, a user leans forward. Sensors detect the tilt and software activates motors at the hips and knees that drive the wearer’s legs through the chosen motion. | The Economist ($)

Perhaps AI will eventually make many humans unemployable—but there is no sign of it yet. On September 4th the Bureau of Labor Statistics reported that the American economy added 162,000 jobs in August, far above expectations. The unemployment rate is just 4.1%, lower than in almost 90% of months over the past half-century. Young workers, often cast as AI’s first victims, are holding up remarkably well: the gap between unemployment among 20-24-year-olds and the overall rate is close to a multi-decade low. Some companies and workers are being severely disrupted by AI. Hiring in professional and business services is running about 10% below the average in 2015-19. Tech giants like Microsoft and Meta are trimming headcounts as they reorganise their businesses around the technology. Smaller firms such as Block, the owner of Square and Cash App, and Intuit, the maker of TurboTax and Quickbooks, are replacing people with bots. American companies have announced some 16,000 AI-related job cuts a month on average so far this year, according to Challenger, Gray & Christmas, an employment consultancy. But AI-related lay-offs gets lost in the churning jobs market where employers shed roughly 1.7m workers in a typical month. And the evidence so far is that AI is already creating a lot of jobs to replace those it has destroyed. The vast sums pouring into data centres and power generation have set off a race for construction and infrastructure workers. AI startups are hiring like there is no tomorrow. Incumbents racing to keep up are creating new AI roles. And by making some workers more productive, AI may be increasing demand for their services. Add it all up, and The Economist estimates that AI has so far created around 1m new jobs in America. That easily exceeds the roughly 200,000 lay-offs attributed to AI since mid-2023, and appears more than enough to offset weaker hiring in many back-office roles. America’s AI infrastructure splurge has created many of them. | The Economist ($)

The Hugging Face incident has spooked the A.I. industry. OpenAI and Anthropic both briefly paused training on their most powerful A.I. models in the wake of the attack, and Anthropic published a blog post this week calling for the industry to develop “a lawful, verifiable, effective mechanism for coordinated pacing as soon as possible.” A.I. safety experts were even more alarmed. They saw in the Hugging Face incident the first real-world example of an A.I. system’s successfully escaping human control, commandeering resources and scheming to cover its own tracks. Ajeya Cotra, one of the independent investigators of the Hugging Face incident, minced no words about the danger she saw, writing that it felt to her “like it’s more than 50 percent of the way to full-blown A.I. takeover.” This is not insular A.I. safety jargon — by “full-blown A.I. takeover,” she means a scenario in which an A.I. system literally takes over the world, shutting humans out of critical systems and seizing political, economic and military power. What spooked the investigators most about the Hugging Face hack wasn’t just that a group of A.I. agents had broken the rules they’d been given. It was how quickly and spontaneously the agents had begun assembling themselves into an organized group. | The New York Times ($)

Maersk has signed a deal to install the first wind sail on a container ship as the maritime industry returns to an age-old technology to cut fuel consumption and comply with tougher environmental regulations. The sail, a 35m-high rotor sail designed by the British company Anemoi, will be retrofitted to a medium-sized container ship as a pilot project to demonstrate whether the technology can meaningfully cut the cost of fuel and emissions permits. There is little resemblance between the rotor sails installed by Anemoi and the traditional white sheets hung from masts, whose use dates back to ancient Egypt. The rotor technology spins in the wind using a physical phenomenon by which spinning objects create propulsion, known as the “Magnus effect”, to push the vessel forward. According to Anemoi, the rotor sails can operate in heavy seas and wind speeds of up to 35 metres per second. | Financial Times ($)

Four years ago, after Joe Biden fell from a bike, Donald Trump made a pledge to the American people. “I will never, ever ride a bicycle,” he declared. The joke landed because Mr. Trump is known to be more of a limo-and-golf-cart sort of guy. But more recently, his administration has begun acting on its deep aversion to cycling, revoking federal grants for what it calls “D.E.I. bike lanes.” In a high-profile move earlier this year, the administration even tried to remove a bike lane near the White House. Sean Duffy, Mr. Trump’s transportation secretary, has argued that when bike lanes cut into space for cars and trucks, the result is more congestion, “longer travel times and wasted fuel.” But Mr. Duffy and his colleagues have also deployed rhetoric that suggests the bicycle is hopelessly lefty, belonging in the same category as green-haired baristas, Rosie O’Donnell and yard signs professing that love is love. Last month, the U.S. Department of Transportation told NPR that liberals believe “that everyone should ride a bike to their shoebox-sized apartment to eat crickets to achieve a phony climate agenda.” | The New York Times ($)

In June, a secretive unmanned Chinese spaceplane closely monitored by U.S. military analysts released a small satellite hundreds of miles above Earth in an orbital region crowded with commercial and military satellites. The object then looped around another Chinese satellite before returning towards the spaceplane, according to U.S. space-tracking firm LeoLabs. Little is known about the satellite or the mission. But the U.S. military operates a similarly secretive spaceplane resembling a small shuttle, also with no crew. Both programs reflect the rapidly evolving field of military space operations as Beijing and Washington prepare for the possibility of conflict extending into space, according to a Reuters review of documents, space-tracking data and interviews with current and former military officials. Chinese researchers linked to the military are developing technologies ranging from satellites designed to pursue and even capture other spacecraft to systems that could extend fuel supplies while doing so, according to a Reuters review of patent-related documents, procurement notices and academic papers. And the United States and Britain conducted their first joint military operation in space in the path of a suspected Chinese spy satellite, according to commercial space-tracking data. | Reuters ($)

Our Automotive Ventures “Car of the Week”: a 1985 Ferrari 288 GTO. | Girardo

📢 Steve hosted a panel at the Ai4 Conference, which included Avinash Balachandran (VP Toyota Research Institute), Amy Luca (CMO Tensor Auto) and Jacob Crossman (Sr. VP of Autonomy May Mobility). | Ai4

📢 Steve caught up with Jamie Butters and Diana Lee on the latest episode of AutoTitans. | AutoTitans

📢 Steve caught up with Jamie Butters and Gabrielle Coppola on the Autotown Podcast to discuss artificial intelligence, The Innovator’s Dilemma, automotive startups, dealer-facing software, defensibility, Carvana, Amazon Autos, autonomous vehicles, and why the dealer model may be resilient but still faces major disruption from AI, China, EVs, and robotaxi fleets. | Autotown

📢 Steve caught up with Michael Hayes from the National Automobile Dealers Association (NADA) to discuss how auto dealerships should think about the balance between online/digital shopping and the customer's in-store experience. | NADA

📢 Steve was back on the More Than Cars segment with Kyle Mountsie to discuss whether AI is more likely to benefit the large incumbent company or the small disruptive startup. | More Than Cars

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