Daily Tech Snippet: Wednesday, December 14

• Google Parent Company Spins Off Self-Driving Car Business: Google’s parent company, Alphabet, said on Tuesday that its autonomous vehicle project was spinning off from its research lab X and would operate as a stand-alone company under the name Waymo. Alphabet’s decision to spin out Waymo is a signal that the company thinks its self-driving technology has advanced beyond research project status and is ready for commercialization. Autonomous vehicles are a hotly contested field of technology, pursued by other tech giants, promising upstarts and traditional automakers — all who see the potential of self-driving cars to upend the automobile industry. Advancements in sensor technology coupled with breakthroughs in machine learning — the ability of computers to learn from vast amounts of data and improve over time — mean driverless cars (essentially supercomputers on wheels) could become a regular sight on the roads over the next few years. The challenge for Google is to devise a successful strategy for making money from self-driving cars. Unlike Uber, it doesn’t have a ride-hailing service that can generate fares — at least not yet. And unlike Tesla or other automakers, it doesn’t have an auto manufacturing background to build cars or a network to sell them. Creating its own car would also require a significant investment to build a factory and establish a supply chain. It could work with automakers to supply autonomous driving systems — akin to how Google provides the Android operating system software to smartphone manufacturers. However, car companies are apprehensive about losing control of that crucial technology to Google. “Google has struggled to find a way to come to market,” said Roger Lanctot, an associate director at research firm Strategy Analytics. “We’ve come to the point where Google needs a return.”

• Why Google, Microsoft and Amazon Love the Sound of Your Voice: Not so long ago, voice recognition was comically rudimentary. An early version of Microsoft's technology running in Windows transcribed "mom" as "aunt" during a 2006 demo before an auditorium of analysts and investors.Speech recognition must get much better if we are to speak naturally to our gadgets. So the tech industry is vacuuming up all the conversations it can.So Amazon, Apple, Microsoft and China's Baidu have embarked on a world-wide hunt for terabytes of human speech. Microsoft has set up mock apartments in cities around the globe to record volunteers speaking in a home setting. Every hour, Amazon uploads Alexa queries to a vast digital warehouse. Baidu is busily collecting every dialect in China. Then they take all that data and use it to teach their computers how to parse, understand and respond to commands and queries.  The challenge is finding a way to capture natural, real-world conversations. Even 95 percent accuracy isn't enough, says Adam Coates, who runs Baidu's artificial intelligence lab in Sunnyvale, California. "Our goal is to push the error rate down to 1 percent," he says.  "That's where you can really trust the device to understand what you're saying, and that will be transformative." 

• Silicon Valley VCs are growing wary of on-demand delivery: Led by Sequoia and another blue-chip Silicon Valley firm - Kleiner Perkins Caufield & Byers - venture investors have poured at least $9 billion into 125 on-demand delivery companies over the past decade, including $2.5 billion this year, according to a Reuters analysis of publicly available data. But that torrent of money has slowed to a relative trickle in the last half of this year, and many VCs have lost faith in a sector that once seemed like the obvious extension of the success of ride-services juggernauts such as Uber.The bulk of this year's investment - about $1.9 billion - came in the first half of the year. Only $50 million has been invested so far in the fourth quarter, the Reuters analysis found. Several prominent Silicon Valley venture capitalists said in interviews that they now believe many delivery startups could fail, leaving investors with big losses. Venky Ganesan, of Menlo Ventures, said the sector has no clear way to cut costs or boost revenue. "You can’t raise prices on consumers, and you can't cut labor costs," he said. "The core unit economics didn't make sense." Dalton Caldwell, a partner at Y Combinator - the prestigious tech incubator that birthed a number of delivery startups - was also skeptical, though he thought companies with top-notch operational capabilities could succeed. Many delivery startups, he said, "make the assumption that once you get bigger, things will get easier, and that's wrong. There is driver churn, operations people that cost money, more support costs."