- Alphabet’s Other Bets segment, which includes Waymo, generated $372 million of third-quarter revenue, up 8% from a year earlier but just 0.3% of Alphabet’s total sales.
- The losses are growing. The segment’s operating loss widened to $2.05 billion from $1.43 billion a year ago, an increase of about 43% (Lumida calculation), at a time when Alphabet’s free cash flow has turned negative because of heavy AI spending.
- Waymo keeps expanding. CEO Sundar Pichai said it now operates in 15 major US cities, recently opened service in San Antonio, San Diego and Tampa, plans to expand into Canada, Germany, Singapore and Spain, and has driven more than 300 million fully autonomous miles.
- It is raising its own capital. Waymo closed a $5 billion term loan this month, its first debt financing, after raising $16 billion at a $126 billion valuation in February in a round led by Alphabet.
What Happened?
Pichai highlighted Waymo on Wednesday’s earnings call, where Alphabet reported an earnings and revenue miss that sent its shares down almost 10% after hours. Waymo began offering driverless rides to and from the Las Vegas airport last week. Tesla says its Robotaxi network has completed about 3.8 million unsupervised miles, and Elon Musk has said Robotaxi should become a meaningful revenue contributor by the second half of 2027.
Why It Matters?
Waymo has a commanding lead in US robotaxis, but its scale is still tiny relative to Alphabet, and investors who were once happy to fund side projects are now scrutinizing every dollar as AI capex climbs. Waymo’s move to borrow on its own suggests Alphabet wants it to fund more of its growth outside the parent’s cash flow.
What’s Next?
Watch Waymo’s international launches, including Germany in 2027, and whether competition from Amazon’s Zoox, Tesla and Baidu’s Apollo Go pressures pricing. Any move to bring in more outside capital, or to separately value Waymo, could matter for Alphabet’s sum-of-the-parts story.
Affected Tickers and Coins: GOOGL, TSLA, AMZN, BIDU
Source: CNBC
