A few confounders I haven't seen though:
1) Waymo is its own entity, but its brand is linked to Google/Alphabet. A reader of this article will be clear on that by the time they have gotten through the sub-headline.
Any success or catastrophic failure of Waymo/self-driving will have Google spoken of in the same breath as Waymo.
2) Capital Allocation & Diversification - Google had $119 Billion of cash on hand at the end of FY2019 earning no return. More than any other company.
- Alphabet is not Berkshire Hathaway waiting in the wings to deploy its capital in a downturn or buy up unrelated businesses.
- Diversification is a fine strategy, but when you have this much capital to allocate—and ostensibly Alphabet has this much because they don't know what to do with it—not fully funding Waymo itself doesn't make sense.
3) The Waymo blog post about this that Rutledge linked below gives a possible alternative [1]
> “Today, we're expanding that team, adding financial investors and important strategic partners who bring decades of experience investing in and supporting successful technology companies building transformative products. With this injection of capital and business acumen, alongside Alphabet, we’ll deepen our investment in our people, our technology, and our operations, all in support of the deployment of the Waymo Driver around the world.”
Building technology is hard, but building out a car company that can produce vehicles on any scale is also hard. Tesla and Elon now know this.
So maybe by opening up to outside investment they allow strategic partners to share in the risk and outsized reward of success.
Curiously though, only one of the six outside investors listed seem to be "strategic." That would be Magna International, "a leading global automotive supplier."
The other investors are:
- AutoNation: a used/new car buying/selling website
- Andreessen Horowitz: VC firm
- Canada Pension Plan Investment Board
- Silver Lake: private equity
- Mubadala Investment Company: United Arab Emirates sovereign wealth fund
From the outside looking in, I have further questions as to how those are "strategic" investments that could help develop and/or bring Waymo cars to market.
tl;dr Alphabet/Google has so much capital it needs to deploy not using it to fully fund Waymo is curious. Waymo is not a distinct brand from Google/Alphabet. It's not readily apparent how six of the seven outside investors chosen for the "strategic" investment add value beyond capital.