- Let's talk about the
self-driving cars for a second,
because again, we hear a lot
about where that may go.
Where do you think we are in the trajectory of how,
when is this going to happen?
What are the regulatory or psychological hurdles
for people to get over?
Have you been to these test
sites where they do this stuff,
and what's that like?
- I have a lot of thoughts on self-driving cars.
One is -- this is kind of an interesting one --
but in 2008, I think, it was the recession,
the global financial crisis,
and I was driving to work
and they were talking
about what sorts of jobs
were never going to go away.
That was a time when everybody cared
about what sorts of jobs
were never going to go away.
And one of the jobs that got mentioned
on this radio program was bus drivers.
A robot will never be able to drive a bus.
The safety demands of driving
a school bus full of kids
are so high, you're always
going to have a trained human.
And that was in 2008.
And kind of ironically, Google started
its self-driving car project in 2009.
And here we are, not even
10 years after I heard that
on the radio, and already
these self-driving cars
are really quite good.
And I think almost everybody who's working
on developing them, if you said,
"Hey, your thing is never going to be safer
than a human bus driver,"
they'd laugh at you and say,
"Are you kidding?
"It's already almost as safe as a human bus driver,
and in three or four years it's going to be a ton safer."
So there's been a tremendous amount of progress
in self-driving cars.
The Google ones, for
example, they make decisions
200 times
a second.
So they have lidar and radar
and other sensing devices,
including cameras.
They're watching the world
in a 360-degree sphere
that goes 200 yards around the car.
These systems never look down
to check their text messages,
they never reach down to
change the knob on the radio,
they never have a sip from their Big Gulp
and block their vision,
they never have to reach
around and get their kid
to put down -- you know?
They're just always alert.
They're making decisions
200 times a second,
and they're turning out to be --
- You're saying that's a
better capacity than you or I?
- It's turning out to be quite safe.
They can see in the dark.
They can see thermal images.
So those cars, if they're
driving down a highway
in the middle of the
night and there's a deer
approaching the highway,
your eye could never see it,
but they can tell through
their infrared sensor
that there's a warm
object moving very close
to the highway, and they'll slow down
and let that deer run by.
And then some of the things
the self-driving cars do
are just common sense.
For example, when they're
in fog, they slow down --
a lot, because they say,
"Hey, we can't see as far.
We should drive more slowly."
Well, I drive on a very
foggy highway to get to work,
and nobody slows down at all.
People hit these fog banks,
they're going 80 miles an hour,
they slow down to 70.
The Google car could slow down
to 50 or something like that.
And so they just, they
have better sensors,
and then they have very good judgment.
So to me, it's just a question of when the cars
are so much safer than humans that they start
to achieve regulatory approval
for certain use cases.
It's not a question of
if they'll get there.
It's not like we're going to have one day
where there are no
self-driving cars on the road,
and then the next day self-driving cars
will have free license to
roam wherever they want.
- 
- I think we'll see a staged
rollout where, for example,
they'll start maybe in one city,
or even just in a suburban area,
and the cars will be
geofenced and it'll kind of be,
here's a self-driving car zone.
The town of Redwood City, California,
is going to be a self-driving car zone.
And the cars are allowed
to go here, but not there.
And people will watch.
- And they'll co-exist
with human-driven cars?
- And they'll co-exist
with regular people,
and then they'll get a
slightly bigger area.
Then maybe they'll be allowed
on the highways, and so forth.
Phoenix, Arizona, a very
orderly, sunny, western city,
they're going to get there a lot faster
than they're going to get to Calcutta,
where you have to contend
with water buffaloes
on the road and other
sorts of chaotic elements.
But I think over a period of years,
maybe it's many years, we'll
see them kind of spread out
and be adopted more and more broadly.
But the beginning of it, I wouldn't be surprised
if it's by the end of 2017 or 2018.
I wouldn't be surprised if you have a Google-powered
kind of Uber-type of
service in a certain area,
maybe at an Olympic
Village or that equivalent,
or some part of a city.
I wouldn't be surprised if you had that
by the end of the year.
- When you think about
this from an investment
point of view, as you're
thinking about how
to help our clients
benefit from partnering
with firms that are doing this,
how do you think about that now?
- I think, broadly speaking,
I want to avoid owning
things where the market
is assuming that self-driving
cars won't have an impact.
So for example, I kind of feel like the need
for parking garages is
going to go down a lot --
a ton -- in a world of self-driving cars,
because you don't need to
park your self-driving car.
You car can drop you off at the office,
and then it can go drive
out to the cheap part
of town and park itself.
Now, I don't know how many
publicly traded companies
there are that are involved
with parking garages,
but I know the whole nature
of the parking garage business is,
you charge a ton more to be
in a very desirable location.
I think right now, we're at a period of
very high confusion
as to what investors should be doing.
There was a big announcement,
actually, just yesterday.
Intel is spending $15 billion
to buy this company
called Mobileye, which
is located in Israel.
If you happen to have a
Tesla Model S, the chip
and camera that enable that thing
to stay in its lane on the highway
and not hit the car in front
of it, is made by Mobileye.
I think there's going to be a lot of that.
I think there's a little bit
of a musical chairs game going on --
- In terms of the
components or supply chain
for the autonomous driving world?
- Yes, if you add up the number
of big profitable companies
who are having boardroom
discussions right now saying,
"What's our plan for self-driving cars?"
The Chairman of the Board asks that question,
and the CEO says, "We don't
really have a very good plan,"
there's a ton of companies like that.
Most of the automakers, for example, are in that situation.
And so I think there's a real
scarcity value on anybody
who's got self-driving car talent,
they're all being acquired like crazy.
So I'm looking for companies
that will get acquired.
