Tesla Expands Robotaxi Across Florida as Amazon’s Zoox Falls Behind

Executive Summary

Tesla launched its robotaxi service in Tampa and Orlando, becoming the first commercial operator ahead of Waymo in Tampa, while deliberately keeping fleet sizes small, estimated at two to three vehicles per new market as a conservative safety-first strategy.

Zoox voluntarily recalled its entire US fleet of 105 autonomous vehicles after one drove into a smoke-obscured fire scene in Las Vegas, raising questions about Amazon’s commercial commitment and Zoox’s NHTSA exemption petition timeline.

China and Kazakhstan formalized an agreement to establish domestic assembly lines for autonomous CITRAC heavy commercial trucks in Kazakhstan, which Grayson Brulte and Rob Grant frame as a de facto Autonomous Belt & Road Initiative targeting the five-nation Eurasian Economic Union. Across all three signals, the hosts emphasize that narrative, geopolitical positioning, and deployment velocity are often as strategically significant as raw operational metrics.

Key Autonomy Signals Episode Questions Answered

Autonomy Signals Topics & Timestamps

[0:00] KPMG Sponsor Introduction

KPMG works across the full autonomy ecosystem, advising operators, OEMs, suppliers, insurers, and investors as autonomous mobility scales.

[01:34] Signal 1: Tesla Expands Robotaxi to Tampa and Orlando

Tesla launches its third Florida market alongside Miami, with all three service areas backing up to the airport. Tampa marks the first market where Tesla launched commercially ahead of Waymo, with a deployment velocity running roughly 10X faster.

[27:15] Signal 2: Zoox Recalls Its Entire 105 Vehicle Fleet

Amazon’s Zoox recalls all 105 vehicles after an unoccupied robotaxi drove into an active fire scene in Las Vegas, blinding its sensor suite. With nine vehicles in Miami and no Amazon branding anywhere, questions mount about Zoox’s commercial direction.

[57:15] Signal 3: China Embeds Autonomous Truck Manufacturing in Kazakhstan

China and Kazakhstan formalize domestic assembly lines for autonomous SITRAK heavy trucks, turning Kazakhstan into a Eurasian production and deployment hub and accelerating the Autonomous Belt and Road Initiative.

Full Episode Transcript

Tesla Robotaxi Launches in Tampa and Orlando

KPMG Ad: The autonomy economy is real. Commercial robotaxi operations, humanless freight runs, AV infrastructure investment measured in billions. The question is no longer whether autonomous mobility scales, it’s who advises the companies building it. KPMG works across the full autonomy ecosystem: operators, OEMs, suppliers, insurers, and investors. At the moment it matters most, when the road ahead is uncertain, we’ve already been there. KPMG, accelerating what’s next in mobility.

Grayson Brulte: Rob, it’s the end of July, and we’re not going on break here at Autonomy AI. We’re continuing to break down the signals, and oh boy, oh boy, there’s signals, and there’s a little thing called earnings. Tesla reported earnings on a bunch of things. Alphabet reported earnings. Learned just a tad bit, but we also learned that analysts don’t really seem to ask about grounded search, which is potentially growing Alphabet’s revenue uncovered, but OMEGA found that out. And now let’s get into the autonomy signals that we dearly care about here on Autonomy Signals. The first signal this week, Tesla goes Florida maxing by launching in Tampa and Orlando. Oh boy, we’ve got on the ground intel and opinion on that. The second signal this week, up in smoke. That’s right, with Cheech and Chong with their s- new sidekick, Zoox. Perhaps they’ll they’ll bake the car. You never know. Or those that are old enough like we are, you can hot box it. The signal three, China embeds autonomous trucking heavy manufacturing in Kazakhstan. Well, once again, OMEGA was ahead on that ’cause we covered that last week and several weeks before. With an eye on Eastern European domination, it all comes down to manufacturing as we know. Let’s start with signal one, Rob. Tesla robotaxi goes to Orlando, or is it really Orlando? And Tampa. What do we know about those signals?

Rob Grant: Yeah. Well we’re deep into the summer here at AUTNMY AI. We’ve got ocean, we’ve got sand, and we’ve got Tesla. I mean, three things that bring a smile to my face. So just this week, right before earnings, Tesla officially launched its robotaxi ride-hailing service in Tampa and Orlando, right, just ahead of the second quarter earnings release. Now, the initial operational maps, particularly in Tampa, reveal boundaries centered in downtown Tampa, extending into Tampa Heights, West Tampa, and parts of East Tampa, but explicitly excluding the airport, South Tampa, and suburban areas. Similar small operational domain in Orlando as well. I think it’s to the northeast of the city, or at least northeast of the airport. you know, Florida’s your realm, not mine. but this continues a rapid kind of clustered Florida expansion of Tesla, building on its recent deployment of just a few weeks ago in Miami, which we covered here. The really interesting thing about Tampa that really draws my attention is that it preempts Waymo’s commercial service entry. So this is the first market where Tesla is the first to launch commercially ahead of Waymo, though, to be fair, Waymo has been testing on Tampa streets since late 2025. But we’re gonna come back to that because the speed of these deployments, to me, is a really interesting signal about the different approaches that Waymo and Tesla are taking to dominate the future of this industry

Reading Tesla’s ODD Strategy: Airports, Sports Corridors, and Field Intelligence

Grayson Brulte: There are different approaches, and I’m not gonna be Florida guy, but I’m gonna be. Oh, how about I’ll be dad? How about I’ll be, I’ll, I’ll be, I’ll be dad guy for this one. There’s only one place in Orlando that every kid wants to go. I’m s- I’m, I’m sorry Brian Roberts and Comcast, I know the numbers at Universal Epic are going down. Every little kid wants to go see Mickey Mouse. And when you go see Mickey Mouse, you do one thing. And I know this all too well. You wait in lines, and you wait in lines, and you wait in more lines. And, and why do I bring that up? Because Disney World is technically in Kissimmee, Florida, not Orlando, and that is in the southwest. Tesla is operating in the northeast. And why is the northeast important? There’s a common denominator between the Tampa market, the Miami market, and the Orlando market with that. The ODD i- is backs up to the airport. That is the key to The ODD in all three markets backs up to the airport. That signals to me that Tesla is hoping to get airport service at one of these markets, if not all three of these markets. And then if you look at the driving environment, David Moss and I were, were down in Miami in the Doral area by the backside of the airport. It is not the, quote-unquote, “Miami driver experience.” If you live in Miami or you visit Miami frequently, you’ll know what I mean by that. In Orlando, that northeast of the airport is a more residential area. The interesting thing about Tampa, near the airport, but you and I are both nerds when it comes to sports. The George M. Steinbrenner Field, spring training home of the New York Yankees, and soon to be 28th world championship, if we can ever get our act together, and where the Bucs play. So it’s in that sports corridor. Another interesting thing to point out, faster roads in that area than historically other ODDs have operated. So while the ODDs are small, a lot of signals from our field reports and intelligence on the ground are emerging

Deployment Velocity vs. Fleet Scale: Tesla’s Conservative Expansion Playbook

Rob Grant: That’s right. And look, I think for me, and let’s be clear, the, the number of vehicles out in these relatively small ODDs is itself small, right? I, I, I think that is intentional, right? Not only because of perhaps the ability to register and move a, a number of vehicles in there or constraints around charging or depots. But I think it’s, it’s really a conservative strategy in terms of where the vehicle stands. And they talked about this yesterday, Elon and, and Ashok talked about it yesterday, about prioritizing safety. And I think you and I have seen that conservative strategy where it is a very geographically defined conservative expansion based upon safety and the avoidance of putting the vehicle in situations that might result in either unfavorable behavior or unfavorable coverage of a necessary behavior. so they are prioritizing kind of what I call it as a deployment velocity, so getting to these new markets quickly getting to many new markets but at small scale as a tangible, tangible kind of KPI, right? So the k- the, the, the key performance indicator for Tesla is saying that they’re in many markets and that they’re opening markets quickly. And it, it is a narrative shield, so to speak, that reinforces the premise I was just talking about, that its vision-only architecture still needs to be kind of validated at large scale in the way that I think they will get there to do these much larger initial deployments. But I believe this, this is a, a somewhat, v- as we talked about, high risk, high reward move for Tesla in terms of getting to many new markets, in terms of the speed at which they go from the first ground truth vehicle to deployment with no supervision, right? That’s a very different method than Waymo. but it also shows sort of the internal caution around expanding too quickly in terms of fleet size and fleet density. So it’s, it’s not necessarily about challenging Waymo for percentage of market share right now. It’s about showing different things that signal that that competition will come and it will come faster than others expect because the deployment velocity right now is much faster than Waymo

Grayson Brulte: The deployment velocity is incredible and we, we expect it to accelerate looking to the Arizona market, po- potentially the Phoenix metro, and then also looking to Las Vegas. And, and Elon said something on the call, which you and I have spoken about for years now, practically probably almost a decade, where he said if a Tesla robotaxi gets into an incident or into a crash, it is global international headlines and it’s the, the world’s coming to an end. And, and Elon’s right. Any, any which way you cover, ’cause y- y- you know, to some individuals he’s a polarizing figure, to other individuals he’s a folk hero. I’m not choosing a side, I’m just saying it will get international headlines and, and it’s unfortunately the society we’re there. And this has been going on, you know, as you and I have discussed, for decades. I have a lot of friends in the media, and so years ago I just put on my stupid hat and started asking dumb questions, and I said, “Why do you do this? Why do you do this?” And several reporters at several major international outlets, including major print papers, said because the ad revenue goes through the roof. I even had one individual in the media who told me that is his yearly bonus is done from running the negative Tesla articles because the amount of, amount of ad revenue it makes. That is the truth, folks. It, it, it, it, it’s sad. So now that we put that out there on the table, I’m curious, Ralph, from, from your perspective, your experience launching right now we believe there are two vehicles in the Orlando market, Tampa could potentially be three. We know because I’ve counted license plates, there’s over 10 currently in Miami. Should 10 be the baseline to open a market, or do you think that they’re gonna continue to do this two to three because of the potential risk aversion?

Rob Grant: I think because the narrative that they’re trying to put out there is reputational and psychological almost, right? It’s, It’s, to say, “Hey, we may not have the fleet volume that Waymo does, but we can do other things much more quickly than Waymo can. and we can do it vertically integrated, unlike Uber.” So there’s a little bit of this at Uber as well, right? and so I think whether it’s two or 10, it doesn’t necessarily matter for what the narrative is that they wanna put out there and what they want people to judge them on, which is the narrative, right? Which is why I can imagine before the, the next earnings call, you will see those vehicles in Las Vegas, and you will see those vehicles in Phoenix at some relatively small scale, right? Two to 10, maybe 15 depending on when they wanna get there. But that’s, that’s what they’re trying to do is, is, is, yes, they still wanna take a conservative risk strategy when it comes to safety and scaling. and look, Elon is, is not wrong both be- in a Tesla-specific way in terms of the scrutiny it gets, but the industry gets the general scrutiny. And, and what we’ve seen, and I, and I know it, it drives some of the, the true safety diehards nuts. Yes, we may not have robust permitting and safety metrics and safety regulations and standards out there, and I, I want them as much as anybody else. But the market punishes people who take unnecessary risks. we’ve seen it with Uber ATG, we saw it with Cruise, we saw it with Plus AI. we’ve seen it with many different companies. We’re seeing it with Baidu in Hong Kong right– I mean, in China right now. the market punishes folks for a singular major error here. and so there is the reality that even Tesla has to face. As much as people think Tesla operates, you know, sometimes beyond the bounds, they recognize reality too. One severe fatality could cause not only their aspirations to falter or, or extinguish altogether ’cause that’s been the history in this industry. It’s not just falter, it’s extinguish. and so I believe there is a, a deliberate attempt here to make sure that initial scaling goes as well as possible because you can’t get to that larger scale if you run into an issue early on, and that’s just- Somewhat in your control and somewhat not in your control, right? Obviously, the, the, the greater number of vehicles, the greater number of miles, the greater likelihood that an issue can occur. and we’re seeing that somewhat with Waymo, and we’ll talk a little bit about with Zoox coming up. but the, the, the trend isn’t super predictable. You could say, “Yeah, I get one crash in a billion miles,” but that one severe crash could happen in your first 200,000 miles. Doesn’t necessarily mean one in a billion, then it’s gonna happen on the billionth mile, right? So, you do everything you can to ensure that your initial rollouts go very well. And I think Tesla is taking that conservative strategy, but also wrapping it in this overall narrative, which is, “Hey, yeah, we may be doing what others are doing in a similar sense in that, but we’re also different,” right? “We’re also moving straight from kinda ground truth vehicles to unsupervised vehicles faster than anybody else. We’re also opening markets. Yeah, they may not be the full city, but we’re opening them, putting vehicles, and saying to the public, ‘You can access our rides faster than anybody else.'” So, these are the things that signal that, yeah, once we feel comfortable on the safety side, our ability to meet that expectation that’s out there about ramping robotaxis and scaling them greatly from the Tesla narrative, can still be met.

Tesla’s Culture of Safety and the Lessons-Learned Playbook

Grayson Brulte: What this says to me is what Walt and I have talked a lot about on Autonomy Markets, that Tesla’s culture of safety is not truly understood by the market, and what you’re describing validates that, that they have a culture of safety. And furthermore, what you’re describing, in my opinion, is that Tesla is deploying the lessons learned playbook. There are some individuals out there that think Mr. Musk is a cowboy, he’s gonna do whatever he wants. And what you eloquently described, and what Walt has described from Tesla’s culture of safety says, no, they’re looking at every incident from the Elaine Herzberg incident that happened with ATG in Tempe to the unfortunate incidents that happened at Cruise and, and other incidents that happened, said, “Okay, we can’t make these same mistakes.” To me, that says that you have a disciplined organization rolling out robotaxi. I know to some of the, the retail in- investors in Tesla, you don’t wanna hear that ’cause it’s not gonna be all at once. But to me this is, this is a very diligent, very thought out, highly strategic rollout here of trying to avoid the mistakes that were made in the past

Rob Grant: Agreed. Agreed. And then, and the interesting thing now is, right, right, Waymo is in 11 markets in the United States. Believe Tesla is now in seven of those 11 markets. you know, California we’re including in that list, even though it operates somewhat differently, but they do have a public service in California, not with autonomous vehicles. But They are saying, look, we’re not as far behind as people think in terms of the infrastructure, the operations, the, the, the, the public building of reputation and things of that nature, public ability to access our vehicles. I mean, where they are behind, and I don’t think they would even argue they’re not, is just in terms of sheer scale of vehicles and, and scale of trips and scale of utilization and hours of operation and, and geographic domain. But again, their ability to get to these markets and open them up is, I mean, it’s what? 10X. It’s almost a year faster than what we’re seeing out of Waymo. we just had Waymo announce that they’re close to ending mapping operations in Charlotte and beginning driverless testing in Charlotte. They started in Charlotte in February I think this year with their, with their mapping, and now we’re in July. They will do testing, which I would assume is probably gonna be at least 90 days. That’ll take us into September or October, and then it’ll be driverless you know, employees probably for a little bit of time. So they, they will probably have their first public consumers in a driverless vehicle in Charlotte December or January December of this year or January next year, being nine, 10 months from when they started mapping. Now we’re looking at Tesla in Tampa, where their first mapping and ground validation vehicles I think were seen three weeks ago, if not less than that, and they’re already to driverless operations, right? That is, that is 30 weeks compared to three weeks. So yeah, I was right with 10X. Sorry, I am not a math major. so that is what they’re signaling here is, yeah, we’re going to be conservative ’cause I think we have to be ’cause you get punished if you’re not. You get punished not only from regulators after the fact, but you get punished by the market. and you get– When you get punished by the market that is severe, particularly as a public company. That means withdrawal of funds. That means everybody, all of your businesses lose, right? and so you’re not just risking one part of a smaller business, right? You’re risking larger parts from a smaller business. And so the, the economics as well as the, the, the safety make more sense here. But I do like the narrative that they’re putting out there because I think they’re trying to be very aggressive in saying that once we get to that safety confidence level, watch out. Watch out

Grayson Brulte: No, you’re, you’re right on the narrative. I think for us that we’re watching here internally in Autonomy AI, that we would encourage our listeners, viewer watch, watch any public commentary from Waymo around the EMA paper. It’d be very interesting to watch if Tesla continues to scale and hold this narrative. So, so watch that there or reach out to Rob and I and we can explain that to you in depth. Let’s move on to the risk here, ’cause OMEGA uncovers some really great risks here, Rob. Simple risks, but practical risks. Tesla’s robotaxi fleet remains sub-20 vehicles indefinitely due to regulatory or operational constraints limiting revenue materially in each market. That’s a valid point, ’cause right now Bloomberg has reported, and Axios has as well, that Waymo’s current fleet in the United States is over 3,800 vehicles, and if th- the fleet size are gonna have to stay under 20, that’s something to watch

Rob Grant: Yeah, I think it’s– this is a probably medium likelihood, relatively low severity thing, I think for the near term for Tesla. I think one, as we’ve identified already here I, I think it’s their intent to keep the fleet scale small until they feel super confident in their ability to operate safely. I do think as they move forward, and particularly as regulatory hurdles begin to peel away, right? we’ve seen NHTSA take a f- some big steps in ensuring that the Cybercab without steering wheel, without pedals, is moving closer towards, you know, the ability to, to manufacture at scale with federal government approval. Not there yet, but we’re seeing the signals. The signals on that are pretty loud. I mean, you have to be kind of head in the sand to, to ignore them. and I think that’s a good thing. And that will not only help Tesla, that will help others as well. so in a, in a sense, where we’re heading is, at some point, Tesla will have to show that it can get more vehicles out there and that it can begin to see robotaxi as a revenue generator. and that it is making progress towards the market share that it owns in each market that it’s operating in, right? Outside of San Francisco where I think we have the best sense of, of the percentage of the market that, that Waymo has it’s a little bit harder to pin down Waymo market share percentage ’cause, one, they don’t have a tremendous amount of vehicles outside of San Francisco. They’re building them up. And two, their geographic operating domains are smaller than, say, Lyft or Uber. So you may be able to make some comparison within the same domain. And then they are using Uber in Atlanta and Austin, so it’s kinda hard to separate the two. But at some point Tesla has to show that it’s both gaining ground on Waymo, but also gaining ground on incumbents like Uber and Lyft. and I don’t necessarily think that pressure is super short term. I don’t– Meaning like, I don’t think it’s the next two quarters, even three quarters. But I do think, you know, starting a year from now, you’re gonna have to show material growth, and material growth begins with fleet density and fleet utilization. And that is necessarily amongst many other things, but necessarily tied up with fleet size. and so that size will just have to get bigger.

Grayson Brulte: That brings us to our Zeekrs. This one’s tailored to the Tampa Bay market, Tampa specifically. Geofence exclusion of Tampa International Airport. Joe Lopano, sir, when you ran it, you did a phenomenal job. I’m sure the airport misses you. In South Tampa, caps addressable ride demand significantly. Why do I say that? South Tampa, home to Riverwalk. You’re a hockey guy. It’s home to the Lightning. It’s fun. I went to a Stanley Cup game there. A lot of fun, a lot of rides, a lot of action. So where they’re operating doesn’t have that action. Yes, I know you’re by the Bucs. Question, does it run during the NFL season? And then as we get to the spring, does it run during spring training? Something to watch, but it seems that these areas are particularly chosen because they’re not as high volume

Rob Grant: Yeah, I think that’s right. I think that’s right. And look, I mean, these areas that you’ve mentioned are where Uber and Lyft drivers in Hillsborough County, they, they see the greatest demand. That’s where they see the greatest use of their services. and so in order to really show what we just talked about, which is meaningful revenue, scale ability to operate safely in, in the most severe conditions in Tampa, you have to get to these areas. and so Tesla’s not there at first. I think obviously that is a deliberate choice. They don’t just draw their operational design maps by accident. in fact, we’ve seen them be very creative. If you all remember the initial drawings of the ODD in Austin very Elon sense of humor with that. so I, I– they will have to get there. And, and in order to really show that commercial appeal and commercial competition, right? I mean, ultimately they have to compete as a business against the Waymos, the Ubers, and the Lyfts. you have to be in these areas if you’re gonna do that. they’re just too full of consistent demand and high utilization, so that means you’re gonna have to get your wait times down. You’re gonna have to get your pricing correct which is all a matter of, of, of scale, positioning you know, depot infrastructure, all of that. So, I mean, this requires Tesla to, to, to get its ducks in a row in order to be a, a competitive option for consumers in those areas.

Grayson Brulte: In that, I was like classic Elon ODD that you referred to in Austin. It was not a top hat. That’s all I’ll say. It was not a top hat. Use your Elon sense of humor for that. It was not a top hat. Let’s go on to OMEGA’s take here, ’cause OMEGA has a good, I would say G-rated, Walt Disney approved take here, which is very interesting. Oh, and here’s a history fact before we go into OMEGA’s take. For our audience that doesn’t know, I don’t know if you know this or not, we haven’t spoken about this, the TPA, Tampa International Airport, was originally built to serve Walt Disney World before there was an airport in Orlando. True interesting fact there. And it was the first airport that had automation to move passengers to and from the terminal. So interesting facts there. Now that I have gave you a history lesson, we’re going on to OMEGA’s take, G-rated style. ” Tampa is not a test. It is the third node in a deliberate Florida corridor lock-in. However, geofencing that excludes the Tampa International Airport in South Tampa caps near-term economic disruption below threshold. Meaning the competitive threat is reputational and psychological rather than operational in Q3 2026. While Tesla wins the PR and first mover race in Tampa, the lack of fleet size transparency and softening metrics in older markets, Austin, suggests that the true operational scalability and ca- and capacity, therefore, remain unproven under this rapid expansion model.” This sums it up, and I gotta give credit, kudos to you and We- Weeby and Weedies when we program OMEGA, and then she’s just getting smarter and smarter. Another great take from OMEGA

Rob Grant: Yeah, I mean, OMEGA is, is just beyond my level of intelligence at this point, so I’m just gonna be asking it what I should be eating for breakfast in order to get smarter. you know, so my, my, my black cup of coffee is just not gonna, gonna suffice anymore apparently

Grayson Brulte: Well, I drink a lot of coffee a- a- and c- and coffee’s good. Let’s go on to to signal two here, and I had coffee before this and now I’m really wired. It’s great. We’re going up in smoke, Cheech and Chong style, then we’re hot boxing a Zooks. What do we know about this signal?

Zoox Recalls Its Entire 105-Vehicle Fleet After Smoke-Scene Incident

Rob Grant: Yeah. So I mean, Zoox just one of the more fascinating companies to me in this space, and we’ll get into that a little bit more. But, but, but here’s why it, it, OMEGA brings this up as a signal. So recently, Zoox voluntarily recalled its entire US fleet of 105 autonomous vehicles for a software update, and this action stems from a June 2026 incident in Las Vegas where an unoccupied Zoox robotaxi. And when we use that term, we mean actually one of their purpose-built taxis, not their test vehicles, which are I forget, some kind of SUV that’s all painted white. We’re talking one of their actual kinda toaster-looking vehicles. one of these unoccupied Zoox robotaxis drove into an active smoke-obscured fire scene, requiring a remote teleoperator to manually reverse the vehicle after its sensor suite was blinded. So the recall was sent out July 7th, accepted by NHTSA and they avoided any kind of mandatory software freeze or fleet stand-down from NHTSA, and their vehicles are back on the road. Two things more. The recall reflects escalating NHTSA enforcement targeting a recurring cross-industry pattern of AVs failing to recognize emergency cues, right? Smoke, fire, flashing lights, sirens, and interfering with first responders. as many of you may know, NHTSA put out a letter to the industry really taking them to task, being like, “This is no doubt a safety issue. Get your stuff together, industry.” And they required each AV developer to meet with them to to inform NHTSA and tell them what actions they’re taking to improve in this area. And those mandatory meetings should conclude, including with Zoox, by the end of this month. we must remember Zoox has an active petition for exemption in front of NHTSA. so their Zoox robotaxi has not been granted an exemption to commercially deploy. So Zoox has gotten, under a different part of the law, an exemption to put these vehicles out with consumers of the public in them, but they cannot charge. They are, by fiat of the federal government, unable to charge for rides in these vehicles anywhere. and then lastly, I’ll say before we, we, you know, I ask you kind of what, what’s in your head about this, one thing that really jumped out at me, right? We were just talking about Tesla and its scale, right? It’s getting to markets, but it’s not coming with a lot of scale, but it is going to new markets, in seven of them now. I think the latest count from the Texas DMV is they have over 100-plus vehicles in Texas alone. Unsure about the total number of vehicles in Florida, but between the three markets, maybe 25 to 30. but here we know Zoox’s ex-exact count, 105. We know Waymo’s exact count from a recall they, they issued earlier this summer, which was close to 3,800. So now think about that. Zoox is at 1/40 the scale of Waymo. You and I follow this globally, so we, we have a good understanding of, of where WeRide’s total number of vehicles are. They’re about 1/30 the size of the fleet of WeRide, and about 1/15th to 1/20th the size of Baidu They are a very, very small operation, and they are one of the longest tenured developers in this space. So I find that very interesting. Very small number of vehicles across its entire fleet, very small penetration in two cities. so there’s a lot to say from where it stands with its regulatory challenges, where it stands with its operational challenges, and now where it stands with just– I’ll call them commercial challenges, but it’s kind of hard to even describe it as a challenge because I’m not sure what their commercial direction is generally

Zoox Field Report: Nine Toasters in Miami and Questions of Commercial Viability

Grayson Brulte: You bring up a, a valid point. We, you know this, we recently, for the Auto Slurs now, we recently went down to Miami and we did a field trip, a field report which we’ll be releasing next week on Zoox. visited the Miami depot, the, you wanna call it the testing area? I wouldn’t even call it a testing area. And they are running in a small few blocks in a, in an area of Miami which we’ll reveal in the field report, so you’re gonna have to tune into that. And being us, and putting on our inspector hat, and thank you to the individual who donated us the inspector hat, we counted nine toasters, nine toasters in the Miami market. And if we know there’s only 105 vehicles and there’s nine in the Miami market, that’s not a commercial operation. I did not count license plates for the Toyota Highlanders. Th- they were test mules, but nine vehicles there running in an area of Miami where we’re not gonna go for dinner. There’s really nothing to do. So th- there’s no commercial activity. Very small. And when I say small, for those individuals that are challenging this, it is probably a fraction of a fraction of a fraction of a fraction of a size as Tesla’s throughout. So I have a, I have a lot of questions there from the com- commercial viability. You, you have the recall issues, you have this. And then all suddenly, I noticed over the past two weeks a change that you and I have discussed. CNBC, Amazon Zoox. This outlet, Amazon Zoox. It’s like, oh, maybe they got on the hint that Zoox doesn’t get much traffic by itself. So, so we, we know there’s b- barely over 100 vehicles. We know in Miami that there’s nine vehicles. We know that they’re having an issue with up in smoke. I still think you should call Chi Chu and challenge to really test it. Putting this all together, where is Zoox? What matters? What do you think is, is happening here? Because you know this, you, you’ve run an AV business. 100 plus vehicles, I, I might not be the smartest guy in the tool. You can’t make a profit, let alone enough to attract investors to get excited about you

Rob Grant: I- it is a fascinating thing because I could understand 100-plus vehicles in one sense, right? That yes, it is 1/40 the size of Waymo, but it’s not like Waymo has a million vehicles out there. So I, I wanna put it in perspective, right? We’re not saying, or at least I’m not saying Zoox is, is finished or barely gotten started. it’s more just given the amount of time they devoted to this, given the amount of money they’ve devoted to this, given that they have had the ability to uniquely capture a market of which nobody’s competing with them in, or at least hadn’t been for a while, or, or had, and I’m talking about Las Vegas, maybe Motional was there, and then Motional had to shut down for a while, and now Motional is back. but, but they have not taken advantage of some of the things that are things that I would put in their basket of advantages, right? Las Vegas is a great market for robotaxis. It’s a, it is undoubtedly a great market. It’s got a great regulatory framework. it, it has some of its challenges where you have to negotiate along the Strip for, for each individual access to the different entities that own the various hotels and, and resorts there. But you’ve got tremendous amount of traffic to and from the airport, right? I mean, that’s a steady business just unto itself. You have a– You could operate in a relatively small operational design domain providing trips in and around from the, the Strip down to the Fremont area and back, right? It’s not the world’s largest spread-out city. It’s not Los Angeles. and yet they’ve seemed to have been unable to take advantage of it. And what I’ve always wondered and we talked about this at Cruise, and I’ve talked about it with other AV companies, yes, you can’t charge. That doesn’t mean you have to be small, right? You have a, a Amazon backing, right? I, I, I, you know, maybe four other companies in the world have more ability to, to, to feed a financial loss in order to grow a business that ha- has a huge TAM associated with it. Why not, why not flood that market with more vehicles, even if it’s for free, right? Why not do the same in San Francisco? I don’t, I don’t understand the small scale it operates at given the resources it has. And then you add on to this perception issue with smoke which as far as we know is unique to them. we’ve not seen anybody else issue a recall around smoke. it makes me wonder how deep do the concerns there go? Is it both a commercial issue or a commercial willingness? That’s what I really talk of. Is there a commercial willingness at Zoox right now? but is there deeper issues? Is it, is it cost? Have they been told by Amazon like, “Hey, you know, you’re, you’re basically less than a rounding error in our budget. Stay that way until you show us more.” or is it, you know, there are some bigger issues with the technical stack, right? The routing, which you’ve commented upon in other field reports when you were in Las Vegas, not very kind in terms of the routing there. now we’ve got a perception issue. we’ve seen instances, you know, where they’ve stalled out in intersections and things like that. and so it makes you wonder how– It makes me wonder at least how deep are the concerns over at Zoox right now. And again, last thing I’ll say, I don’t think this means things are over for Zoox, but I’m like, I can’t tell if, if they’re in the, the middle of a baseball game, innings four, five and six and just, just have hit a, the doldrum, or if they haven’t even gotten up to bat. And if not, why not, right? And will they ever? You know, it, it, it, it’s certainly not late in the game, but it’s certainly not getting early either. I mean, we’ve got Tesla getting out there. We’ve got Motional growing. Got AVride moving along. We have for crying out loud, even May Mobility is out there putting some vehicles on the road. so it really makes me wonder what, what is going on behind the scenes there

Grayson Brulte: To me, it could be, it could be manufacturing, ’cause don’t forget their manufacturing is in-house. It could be pressure from Amazon to slow the cash burn as Amazon invests in other areas. It, it could be technical, but 105 vehicles with no transparency. And Mr. Jassy, I’m waiting, I’m asking every time I get a forum, and here’s a forum, sir. Please make a public statement on the Amazon earnings call about Zoox. Tell the market what you’re gonna do about it. Mr. Sundar Pichai at Alphabet, he makes statements about Waymo. Yes, I know this quarter was shorter than others, but Mr. Pichai makes comments, sir. Why can’t you, Mr. Jassy, make a comment? Give us some clarity because Rob’s right. There’s a, there’s a lot of questions swirling in the market. Technically, and I’m not gonna name names, at one point during this, you wanna call it this race or this evolution of autonomy, you could say Zoox was neck and neck with Waymo, or even at one point you could make an argument that they were ahead. David Welch at Bloomberg did a whole thing, I don’t know, six, seven years ago, and Zoox was right there at the top. And then s- ever since that article that Mr. Welch posted, do, do, do, do, do. And it’s unfortunate. It’s like a fall of an icon. It’s sitting here you’re at the end of their career, you see Mickey Mantle out there struggling to catch a fly ball. I mean, that’s what this really feels like. It’s the end of the career. It doesn’t feel like the company’s on the trajectory. It’s, it’s sad to watch, really

Rob Grant: Yeah. And look, I mean, this is reflected in our, you know, road to autonomy robotaxi index, right? It is ranking number seventh and falling right now. and, and part of that is because there are– there is a lot of opacity around what’s going on there that I think they could clarify, right? Number of miles, you know, where are the trips taking place, how many vehicles are out at one time, you know, things of this nature. Y- you don’t have to tell me the routes they’re on. I’m not looking for pickup and drop-off points, you know. I’m not asking you to divulge, you know, a- anything more than things that would help build back confidence in Zoox. right? And it could be even as a simple a statement as you’re talking about from the, the head of Amazon, “Zoox is still an important part of our future,” right? Something like that. you know, it could be as small as, you know, the, the Zoox name on the vehicle now saying Amazon Zoox, right? you see it with the Rivian fleet that they built for electric delivery vehicles, right? that’s been a really good partnership for both, both folks with Rivian’s name tied directly to Amazon. So I, I, I think there’s just– I want more from them. and I think there is more there but without, without really any assurance, you know, I can see why OMEGA, who’s grading things independently of us, has got them graded pretty low and moving lower right now

Amazon’s Hidden Role: Branding, Capital Allocation, and Internal Validation

Grayson Brulte: No, you’re right. And for the audience, Rob and I have no input to OMEGA. OMEGA runs fully autonomous, fully sealed. The verification records are public. You can go on GitHub, download the source code, and verify it independently for yourself. The big question that we don’t know, that I am gonna speculate on, does Zoox not wanna be associated with Amazon, or does Amazon not wanna be associated with Zoox? That’s the big question. That’s the question that we need answered because when you look at this from a public marketing, branding standpoint, exercise standpoint, any term you wanna use, there is no affiliation with Amazon. Go visit the, the Zoox rider station, if that’s what you wanna call it, or the rider lounge, if that’s what you wanna call it, in Vegas. You do not prominently see the word Amazon. And believe me, I have an inspector hat, and I bring a magnifying glass on the road, and I look for weird things. Nowhere to be found. The question is, if Zoox was branded Amazon Zoox, would the public be more inclined to try it? Would it be a completely different business? And, and is Zoox making a catastrophic mistake by not leveraging the Amazon name? That’s the big question, and that’s something that we’re gonna have to watch

Rob Grant: I think 100%, right? even if you go to their website, yeah, I mean, you, you can’t find Amazon anywhere on it. You would have no idea that this company is backed or supported or part of one of the world’s most successful companies who has a very good reputation amongst the public, right? I know my family probably has a very good reputation with inside Amazon, given how often Amazon packages show up at my house. But we also hold, in reverse, a very high regard of Amazon as well

Grayson Brulte: Yes, exactly. I needed something the other day and it was here. Oh, batteries, actually. I needed batteries and it was here in two hours. Yes, we hold Amazon in high regard. And I’ll give you an example. There are several companies, and we can go down a, a, a laundry list of companies that I admire, different things. But let’s look at GEICO, for example, one of Warren Buffett’s first big purchases. GEICO, a Berkshire Hathaway company. They are so proud of that. They could say Zoox, an Amazon company. There are similar things from inside of the Berkshire portfolio that could be done, or there’s all sorts of other different examples that could be done. This is a horrible example, but you can- AB- everybody knows ABC is owned by The Walt Disney Company. There’s all the, the synergies between it, and if Zoox somehow figured it out, one in the trucking, you see more synergies. So I don’t know, I think there has to be a combination of the brands. But l- I digress, but let’s move on to OMEGA’s risks here, ’cause OMEGA has uncovered some wonderfully interesting risks that just so happen to go into your wheelhouse, sir. “NHTSA delays or conditionally denies an exemption petition citing recall as evidence of unresolved edge case risk in dense urban environments.” Ba-dum-ba-dum. Rob’s turn

Rob Grant: Yeah, I mean, look, as, as someone who kind of ran operations for Cruise as we had a series of exemption petitions in front of NHTSA for the vehicles that we were building with, with General Motors at Cruise recalls during this process are not helpful, right? You’re, you’re, you’re both trying to persuade the agency that every piece of evidence that you have provided in, in terms of the alternative ways to meet safety standards and other standards that are required to, to build and put a vehicle on the, on the road are there. And when you have these things that say, “Oh, well, you know, we can’t handle X, Y, and Z very well,” or, “We, we, we need to upgrade X, Y, and Z because of a deficiency,” and it has to be a relatively big one to do a recall, right? I mean, recalls aren’t just something that happen out of, out of the thin blue air. they happen for a reason. And so it’s super not helpful. it’s definitely not helpful, particularly as it relates to an area of concern that, that, that, that NHTSA just put out in terms of not getting in the way of first responders. And so why I find it unlikely, given this Department of Transportation’s openness to the technology, that it will lead to a denial of the petition on these grounds. I certainly think it adds delay. and I certainly think when it gets to an approval that NHTSA will likely attach very specific conditions on reporting and addressing and explaining how Zoox will handle emergency scene atmospheric classifications and how they validated safety in those conditions. And so I think this doesn’t help Zoox materially move forward its exemption petition. It doesn’t kill it either, but it probably adds delay. It adds more reason for The, the technical staff reviewing and the, and the career staff reviewing the petition to have concerns about approving the exemption petition which then makes it harder for the political staff to sign off or at times veto the technical or career staff’s recommendation. I’m not saying those two are in opposition now, but if they were, things like this don’t help the arguments for those who want to provide the exemption. And so I do think it will come as part of a condition for approval, but it also delays that approval as well

Grayson Brulte: Summarize. Concerns and paperwork. That’s that. Let’s go on to the next risk here. So there’s similar lines here. Recall and exemption uncertainty arose Amazon’s internal capital allocation confidence, slowing fleet expansion investment. We hit on that. We have no idea what Amazon’s thinking, but you and I know there’s somebody inside of Amazon that’s looking at every risk under the sun. So that’s a, that’s a good take there from OMEGA from a risk perspective

Rob Grant: 100%, right? I mean, you’re talking both capital to, to build and manufacture these vehicles at scale, to, to put the field teams in place, infrastructure, depot management, everything that comes with scaling a, a robotaxi operation to be a commercially viable, commercially competitive operation in the United States and abroad. and as we just talked about with Tesla, right? A incident from this small rounding error of funding contribution on Amazon’s end from Zoox could have very severe reputational damage to Amazon writ large. And there is a risk/reward calculation that Amazon has to make, right? It, it, it is, it is not about who personally believes in the technology or who personally doesn’t believe in the technology. It is a, a economics calculation. Does the bet on Zoox and its ability to compete for this very large market that we think is out there in robotaxi and then eventually personally owned vehicles and things of that nature and then could you expand it to trucking, all sorts of things. Is that worth the risk of a severe incident that you know, brings not only regulatory scrutiny, but also public perception issues around Amazon’s other bets, right? It, it could have negative reputational effects on its you know, AI bets. you don’t wanna damage your reputation around AWS, and you don’t wanna damage reputation around your delivery product. So you know, I think Zoox has got a– it’s got the external validation that it has to prove it’s worthy of, as we just talked about with NHTSA and the exemption petition, but it has what seems like from the outside, an even greater validation issue with proving itself internally, and issues like this certainly do not help.

Grayson Brulte: They don’t help, and I wanna emphasize it’s bet with a B, and I’m gonna bold it and underline it ’cause there’s billions upon billions upon billions have been made on this bet. And if you just look at the amount of money that was put into that, imagine if they put it into Anthropic or any one of their other investments, you would actually see a return there. So at some point, I think shareholders are gonna wake up and ask questions even though it is a rounding error. Which brings us to our last risk that OMEGA has uncovered. Amazon Zoox reputational and commercial damage accelerates, this is key, if a second incident occurs during the post-patch validation window. I, I look at this risk and say, “Okay, OMEGA, what are you seeing out there in the universe of safety data? What are you seeing out there in, in historical reputation data?” Because if that’s to happen, it’s oh boy, oh boy

Rob Grant: Yeah. They, I mean, they are operating on very thin ice right now, right? and we saw this, you and I had a little discussion about this when you were taking some rides in Waymo a few weeks ago in Miami, where post NHTSA recall for flooding issues that Waymo was having difficulty with. When the weather turned bad, Waymo stopped operating. I think you’re gonna see this extra caution with Zoox, right? If they get anything, wind of, you know, smoke or fire conditions or, you know, an emergency happening in a certain area of the city, I think they may just shut down their operations. They’re small operations to begin with, so you’re not gonna leave a lot of consumers high and dry, but I think they’re gonna be in an extra cautious mode. That being said, I mean, if they run into this similar issue again right, in a, in a close period of time, it is, is gonna be very devastating. All the things that we just talked about, the other two risks, they, they compound. and you don’t wanna compound those type of risks when you’re a very small operator, maybe whose biggest backer is having doubts about you. Saw this, saw this play out at GM directly, right? I mean, there’s no doubt about it, and we know where GM and Cruise wound up

Grayson Brulte: W- we do know where they run up. You, you said, alluded to something interesting there. You said the word dry. Las Vegas is a very dry market, and by the way, just a piece of advice: never buy ChapStick on the S- on the strip. I had to pay $9 for a Burt’s Bee. My lips were so chapped and I was so desperate. It was $9 for a Burt’s Bee. I literally fell out of my chair, even though I was standing up. I said, “Is this a joke?” And I had to buy it ’cause my lips were chapped. It’s a very dry market. Miami is a very wet market. Lot of moisture, lot of humidity. You’re right, all suddenly thunderstorm rolls in. When Zoox does operate commercially, do they shut it down? That is something to watch. That is a great signal. See, we take the the intelligence of OMEGA and we take the intelligence of our brains and we put it together for you in a great show, and we also provide advisory services and a bunch of other stuff, so reach out for that. That’s interesting. Now let’s get on to OMEGA’s take. This is a– I’m warning the audience here, this is a long take, but it’s an important take, ’cause OMEGA’s she’s– I don’t know if there’s Wheaties or m- Wheaties, maybe Cheerios, all sorts of. Oh, maybe oatmeal, Quaker Oats. And we’re gonna get into this take. It’s a long one, but it’s a good one. “The Zoox fire scene recall is a noise event masquerading as a signal. The OTA patch is deployed, the fleet is running, and the real gating variable remains the NHTSA FMVSS exemption petition for 2,500 driverless vehicles,” that’s without supervision, “a decision that will define Zoox’s commercial trajectory far more than the recall ever could. The incident does, however, crystallize a durable industry-wide regulatory thesis. NHTSA is moving towards performance standards such as a mandatory atmospheric obscurant classification standard as a deployment precondition, which creates compliance overhead for every AV operator, not just Zoox. For custom form factor operators like Zoox, fleet size acts as a liability multiplier until perception stacks can autonomously and safely interpret ambitious high-hazard emergency environments without defaulting to tele-operation extraction.” I know that was a mouthful, but I mean, the stuff that OMEGA’s uncovering there, the market’s not discussing. That’s a take, masquerade as a giant potential risk that you so elegantly just laid out.

Rob Grant: 100%. And, and look, I think this take is not a matter of if, it’s a matter of when. and I think NHTSA is moving in that direction. I, I think it would behoove AV operators that have special form factors, which are Zoox and Tesla, we’re talking about two of them today, to figure out how they’re gonna address vehicles that stall out or break or get in the way of emergency vehicles. I think I saw Tesla has put a QR code on its vehicle that you can, if you’re a, a first responder either communicate with them or understand how to move the vehicle in real time. I don’t know what Zoox has. I’m sure they have a first responder plan in place. it would only make sense if they did. if they’re operating in California, they certainly have to have a passenger safety plan. and so as part of that they have a special condition, right? At Waymo, whether it’s an Ojai or a Jaguar or an IONIQ, if the first responder needs to move that vehicle, they can break the window and move the steering wheel and get that vehicle out of the way. You can’t do it in a Zoox. at least, you know, my understanding is you can’t do it. Maybe they have a special, you know, process where you open the floorboard and out pops out a controller and you can move it. I don’t know. But it is something that they have to they have to think about, and it’s gonna have to be a part of– It will be a part, I will say, of their condition for petition approval and how they deal with that

Grayson Brulte: I’ve seen the robotaxi Tesla with the QR code. I’ve scanned the QR code. I was curious what it was. It’s, it’s, it’s for the audience, somebody wondering what are you doing, it is public. It is on the left-hand side, the driver’s side of the, the windshield. So it is public. You can scan it, and it opens up a whole diagram for first responders. The amount of detail that Tesla’s put in there was fascinating. I have not, in my rides in the called the Zooks Mobile, though I have not seen a QR code. It doesn’t mean it’s not there. Or as Rob said, doesn’t mean, like, a PlayStation or Xbox doesn’t pop up and, and you can drive it. But it’s something to watch because Mr. Morrison’s letter, the administrator of NHTSA, it clearly, in, in me reading the tea leaves says enough’s enough. We’re building a business, you’re building a business, it’s time to respect the rules of the road. So that’s what that signals to me. And then we got signal three here, and man, Rob, I tell you, you and I have been onto this one for a while, and everybody thought, “Where have they gone? They’ve gone off the range.” No, we didn’t go off the range. We just went down a rabbit hole with OMEGA, and now we’ve got more concrete evidence that you and I were right. So signal three, China embeds autonomous trucking manufacturing in Kazakhstan with an eye towards Euro-Asian domination. You and I have talked about that part of the world. It’s all about manufacturing. We’re gonna have robotaxis manufactured there. We’re gonna have autonomous trucks manufactured there. And then those, those vehicles and trucks are gonna be exported to Euro-Asia. What, how do you wanna break down the signal? What are you learning from OMEGA?

China and Kazakhstan Formalize Autonomous Trucking Manufacturing Agreement

Rob Grant: Yeah. Let, let’s give the audience a sense of, of kind of what happened and, and, and why we think this is such a big signal. so recently, just a- over the last 10 days or so, Kazakhstan and China have formalized a high-level agreement to establish domestic assembly lines for autonomous Citrac heavy commercial trucks in Kazakhstan. So they’re going to move the manufacturing facility for Chinese-made autonomous trucks to Kazakhstan, right? the project shifts the market away from direct imports and aftermarket retrofits to embedding factory level four drive-by-wire systems and autonomous navigation stacks directly onto an assembly line in a key Eurasian market, right? this industrial alignment operates alongside broader regional initiatives, including cross-border driverless freight routes. Now, think about this, from Astana to Moscow corridors, deployment of extreme temperature L4 mining trucks, such as the Lukai Alpha 125, which is rated for negative 40 degrees Celsius, which I will tell you is very cold, and municipal robotaxi initiatives, which is, you know, there’s a partnership between Freedom Holding and Baidu’s Apollo Go. I mean, what this really signals is in Eurasia, right, you have the EAEU, Eurasian Economic Union, which is an economic and political bloc of five post-Soviet states, Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan. What you have is China moving in to say, “We own this region.” There is going to be manufacturing and everything from the beginning of that truck in terms of building it, to its operations on the road, to what it’s moving, right? All this autonomously is going to be Chinese, Chinese-owned, Chinese-funded, but built in Kazakhstan to then deploy in the EAEU states, right? And, and that is a kind of big step by China to say, “You know what, West? We have just taken off this huge region of the globe. That is ours. You are not welcome here. We own this region from an autonomy standpoint, from a manufacturing standpoint, from a trading standpoint, from a logistics standpoint.” and I think that has Big geopolitical implications because next to these states are some of your far Eastern European states, Poland and Germany things of that nature that suggest that, you know, once China establishes its foothold in Eurasia, it makes it easier to establish its foothold in autonomous trucking, in autonomous mining, in autonomous logistics in the rest of Europe as well

Grayson Brulte: What this is is something that we’ve predicted for over a year now that we have coined the Autonomous Belt and Road Initiative. China is rebuilding the Belt and Road Initiative. This time it’s not infrastructure, this time it’s autonomy. Yes, they’re leveraging infrastructure to build factories because by building a– it, it, it’s brilliant politics by the way. Building a factory in a country does one thing: creates jobs. And it creates sticky jobs, long-term jobs. So mo- so build- so creating the economic funnel to, to fund all of this in that local– You’re building trust with the local community. You’re building trust, you’re creating jobs, and you’re exporting Chinese robotaxis and Chinese autonomous trucks. It is a big deal with massive geopolitical implications. The one thing that I cannot wrap my head around, you and I and our wives are probably the only ones that hear us talk about this all day. I am shocked that this is not talked about more because this is not being done quietly. There are posts on X, there are press releases, th- there’s all sorts of stuff out there. What do you think the massive geopolitical implications of China’s autonomous Belt and Road Initiative really kicking into high gear here?

Geopolitical Implications: China’s Autonomous Belt and Road and the Russia Angle

Rob Grant: Yeah, look, I mean, I agree. This is underreported. and it, it, it’s a mystery to me as to why, because what this signals, this– these, these are two countries. These are not like. Yes, there are various companies associated with this, but these, these– this is a, an agreement between the governments of two countries that basically says Chinese autonomous platforms are to become the default industrial and logistics layer for Central Asian trade and resource extraction corridors, right? It is not only about autonomy per se, but what autonomy can then enable in terms of trade, and most importantly, that resource extraction, right? I mean, there, there are valuable things in that region of the world that China needs to continue to build and promote and expand the influence of its autonomous Belt and Road Initiative. and so what this is doing is it’s, it’s turning Kazakhstan into a regional and production, regional production and deployment hub, I should say, for driverless freight and embedding, as we mentioned, this Chinese autonomy stack infrastructure directly into the Eurasian trade corridors. It has to be mentioned, and this is not anything that either the government of China would talk about or the government of Kazakhstan would talk about, right? This– But as I mentioned, the EAEU, one of its five participating countries is Russia, right? And so this assembly mandate in Kazakhstan, Kazakhstan creates a low-friction compliance buffer for the entire region, for all those five states, where potentially, right, you could see the routing of restricted AI compute and autonomous driving hardware somehow, some way, mysteriously moving from Kazakhstan northbound into Russia. And so I, I– you have to be aware that while Kazakhstan is important for all the reasons we said When you’re bordering with Russia and now you’re talking about bringing autonomy, AI, compute, silicon, all the things that are on the frontier edge of the leading emerging physical AI industry, and you’re putting it right on the border, you have to be aware that that is not unintentional, right? And so I think we’re going to need to monitor this potential route, whether deliberate or not deliberate or under the guise of something else, of how and if restricted AI compute and autonomous driving hardware winds up in Russian hands. And you’re going to probably, I think, see in a period of time escalated OFAC and EU secondary sanctions monitoring of that particular route, given the embedding of this autonomous stack and manufacturing capacity right in the middle of a kind of land mass that puts China and Russia together vis-a-vis Kazakhstan

Grayson Brulte: And the other interesting element of all this, the weather. There’s snow, there’s cold, there’s smoke, there’s fire, and depending on where you are, there’s bullets flying. And then these autonomy stacks can work in that environment. That should be service a massive, massive wake-up call to what’s being developed in the West

Rob Grant: 100%. 100%. And look, I get it, right? Th- this puts Western European or Western and, and European AV developers in a tough spot. they’ve basically ceded this to the Chinese government and the Chinese companies. it’s not a competitive defeat because they never competed for it. and, and I think that’s a result of kind of different incentives within our structures of economy, right? We’ve got VCs and unit economics and things like that, that drive where investment dollars in trucking and manufacturing go. And if you were just to list, you know, countries out by total addressable market or any other unit of economics, none of the five countries in the EAEU, or at least four of the five, wouldn’t appear anywhere near the top of that list. Russia would, but you’d be in danger of violating a tremendous amount of US federal laws by dealing directly with Russia. so you’re kinda handicapped in that sense. but it’s also just not where our competitive incentives lie for AV developers, where in China, where it’s very much a combination of what is good for the industry and what is good for the government, there is a tremendous amount of influence to say, “Let’s establish ourselves as the default leader of autonomy and autonomous logistics and autonomous manufacturing in this region of the world,” because it is good for the government of China. and, and here you’re, you’re kind of seeing those two different philosophies play out. So it’s, it’s not that we, we ceded it, it’s we didn’t even compete for it

Grayson Brulte: We didn’t compete for it until it was too late. I’ll give you an example from history. Look at what China did with the investments in the Congo. And then all suddenly when electric vehicles went mainstream, it’s like -oh, we have to go deal with China. And the same thing is happening again. History is repeating itself, rhyming itself, whichever Mark Twain line you wanna use, you can insert in there depending on what version of history you believe, but it’s obviously repeating and it’s rhyming. That brings us to the risks. The risks here are, are not g- necessarily geopolitical, but very interesting. The, the heavy trucks are running a, a. It’s called a stir- Stirtrack, S-I-T-R-A-K autonomy stack. And according to OMEGA, that Stirstack autonomy stack lacks publicly verified validation for Euro-Asian extreme climate corridors, making commercial viability claims unsustained by independent evidence. That’s true. There’s no public telemetry data. There’s no disengagement data. There’s no p- third-party data. There’s no independence. So that, that is a risk. It’s out there. But I love OMEGA. He says, “Okay, we, we, we, we’ve taught her good,” ’cause you and I are notorious for this. Okay, the headline, yeah, but let’s go down below the headline and see it. So that’s a risk. We, we, if th- if it doesn’t work, this whole narrative we described blows up. But if it does, oh boy, oh boy

Rob Grant: Yeah, I, I mean, I think I, I wouldn’t go as far as the whole narrative blows up. I think, I think the definition of winning from the Chinese government end is different than the definition you just laid out. I think they would love to see that all work, right? That, that would be the culmination of a series of successes for them, both on the technological end the manufacturing end, the operational end, which are all great. But from a pure political end, even establishing these relationships, defining the territories, understanding that this may build a bridge between China and Russia on emerging technology, those are all political wins in a world that is increasingly kind of looking at China and US and whose influence will dominate emerging technology going forward. So it’s not only autonomy, it’s AI, it’s compute, it’s silicon, it’s precious resource metals, all that, right? And that is all embedded in this agreement with Kazakhstan being central for many of those reasons. And so I think it’s a win for them already. What OMEGA’s pointing out is very valid, right? It– These things may not work to the degree that, that they envision but if they do, that’s, that’s just a secondary and, and, and, and third order win. The first order win has already been, I think, accomplished because you will see even in the attempt to build a manufacturing process and get the silicon over there and get the compute over there if that helps establish de jure relationship feed to Russia of some of this technology that’s a win as well for China. and, and, and it’s also a measured loss for the United States

Grayson Brulte: You’re right. And you hit the nail on the head, which brings us to our next, next risk here, which is a benefit to China. Chinese autonomous stack matures faster than expected, ’cause of the environment, harsh environment they’re operating in, enabling CITRAQ-equipped fleets to undercut Western OEM pricing in EU border markets, Poland, Germany, via the autonomous Belt and Road spillover. That’s a very real, possibility

Rob Grant: Yes. And as you and I have had reason to discuss just this week, right? There is an opportunity in Europe for autonomous trucking. it is, I think we both agree, a market that will take longer to mature on AV trucking, or at least to has different incentives than the US market and different ways of understanding kind of the potential margins and, and reasons for the adoption of autonomous trucking in Europe. but nonetheless, it is still a market that is open for competition. There are not a lot of dominant players over there. you know, Volvo is, is, is clearly one of them as, as somebody that actually is in market. But a lot of the other players, Einride, they had some news this week, but it had nothing to do with autonomy, so it’s an interesting transition for them. if you could see the Chinese vehicles being manufactured and working well in the weather conditions that we just described in risk, risk one through the operating conditions of steeps and deep cold and things like that, all of which are conditions that are present in Poland and some of the Eastern European states. if they’re successful, there’s a market to be had there because there is not a lot of competition for that market right now.

Grayson Brulte: No. And what there is in Poland and there is in Germany, there’s a lot of manufacturing. So again, highly strategic, which brings us to OMEGA’s take. The Kazakhstan CITRAK joint venture is best understood as a hardware staging and corridor standardization play operating below the threshold of Western competitive response, not a direct assault on US or EU autonomy economics. Chinese OEMs are winning Eurasian freight corridors by default, not by defeating Western rivals while simultaneously creating structural conditions, EA-EU borderless transit, sovereign digital infrastructure, unvalidated autonomy claims to serve Beijing’s agenda regardless of whether the trucks ever achieve true SAE level of operation. Narrative, narrative, narrative

Rob Grant: It’s the difference between thinking about commercialization and capital and competition from a Western perspective and the difference with the Chinese perspective. Not saying one is better than the other. look, I, I, I’m a firm believer in the Western way of life and want the Western values to be instilled in the, the development of emerging technology. But I’m also not unaware that in particular instances, having government support for government ends can provide situational advantages to China. And in this case, this is what we’re seeing. And in a world where increasingly, you know, both the superpowers are looking for, for, for allies and, and the US quite frankly finding a fractured ally base we can argue why that is. having China put something in the EA-EU that perhaps serves in the background as a way to build and tie closer to Russia is the ultimate goal here. And I, I think it’s, it’s something that, that, that you and I see first. I think others will slowly start to see it as well

Grayson Brulte: There’s always signals in the market, and each and every week Rob and I are here breaking down those signals, analyzing those signals. And if you can’t wait a week, you can send us an email at [email protected]. We offer bespoke advisory services. And now if you’re interested in the industry, we offer a data product. You can subscribe to the indices and get that real OMEGA analysis is, of what’s happening. So reach out. We’re always here. We’re always looking at the signals that the market is not necessarily looking at. The future is bright, the future autonomous, the future is scaling globally. Rob, another great show. I love going all over the world, especially when we go into geopolitics

Rob Grant: Oh, and thanks for allowing me, as always, to, to say what others can say in 20 words in 2,000 words. I appreciate it

Grayson Brulte: And for the record, never change that. Never change that