It's a very capital intensive operation given the amount of vehicles that need to be carried on the balance sheet.

There are many reasons why a conglomerate like Alphabet doesn't want to hold all of that directly on the balance sheet, which is why Waymo is run as a subsidiary with its own sources of capital.

When I was at Uber 10 plus years ago and we were ideating autonomous vehicles. The general consensus was that we would run the technology platform and private equity would own fleets of cars built and operated to our specification.

Waymo has concluded either we are too early in the journey to decouple the tight vertical integration or they want to go very big and own all of the capital expenditure for what will presumably be a global rollout ultimately.

For anyone like me with a finance and technology crossover interest I actually think this is as interesting, maybe more interesting, than the private equity play around data centers at the moment because all of that is constrained against chip delivery and power constraints.

> why Waymo doesn’t just IPO, or raise 100% private raise by Google

This lets them validate their valuation and build a base of investors who could play a bigger role in writing chequew in the future. When IPO comes, those factors make the sell simpler.

a deliberate strategy to establish market-validated pricing, prepare for eventual independence, and impose governance discipline on what has been a protected moonshot project. The move signals that Alphabet is transforming Waymo from an “Other Bets” science experiment into a standalone asset with credible external valuation—likely positioning for an IPO within 2-4 years once profitability arrives.

Money from Google internally might be subject to internal power dynamics and come with strings attached. Having reliable outside funding from people who don't get a say in things might be a better alternative for a project that doesn't want to end up as Stadia 2.0 .

Yes, it provides external validation for the valuation. Otherwise, Alphabet can simply "self value" Waymo at a funny amount like $1T.

There's also a strategic partnership angle in these rounds. For example, Magna and Autonation were early investors in Waymo. Magna operates Waymo's factory in Arizona to upfit their vehicles with sensors, Autonation (the huge dealership/service network) is the maintenance partner.

In general, the Alphabet playbook is that projects "graduate" out of Google X, and are expected to operate as a standalone company, including being responsible for raising funds.

Why risk your own money, when you can risk others'?

Why would you bet your own money when you could bet someone else’s?

>I guess Im questioning why Waymo doesn’t just IPO, or raise 100% private raise by Google.

Why not 100% internal funding, not sure, but the reason why companies don't always IPO is because taking on debt is more efficient (i.e. it's cheaper in terms of cost of capital) than equity, because of the "tax shield" effect, debt can be raised in a non dilutive manner, and a few other (less important) game-theoretic reasons.

Dude. I'm sorry for all the "oTheR pEEPles moNeYs" responses you're getting. Hacker News used to have informed and intelligent users.

a little kid is inevitably going to get killed by a waymo.

institutional finance is america's most powerful lobbyist. in the sense of the fund managers, the little RIAs, the grandmas holding SPY. they ARE the voters.

so to me, aside from making money, making money this way, for a lot of people, protects them from the political grandstanding and their fast demise in their absence.

> Why does Google need outside investors?

i.e. why should I use my money if I can use someone elses'?

Companies raise money for big projects all the time. From issuing debt, to issuing equity.