GM Shuts Down Cruise, Dealer Sentiment Up, Meet Willow, the Fastest Computer

Paul J Daly  0:01  
Good morning. Thursday, December 12, back in the saddle, running around us dealerships yesterday, but today, we're talking a little bit deeper about GM shutting down cruise dealer sentiment being up, and we're meeting Willow, the fastest super computer. Maybe you're actually watching Willow produce a show that isn't actually us because it's so fast. Or maybe it's a multiverse thing. I don't know, super computer. Maybe it's these. I gotta say, super computers are hard to understand.

Kyle Mountsier  0:31  
It is. It's like, I it's already honestly hard to for me, even though, like, I'm a tech guy, right? It's, there's something where, like, my brain stops on, like, so wait, that letter can be just made up of zeros and ones get me there.

Paul J Daly  0:49  
No, no, it's even worse. It's worse than that. It's like, it can be this and this. We were talking yesterday, we were driving through Atlanta. We were like, I don't even think the nerds actually know how it works. Yeah, nobody actually knows it's just like all the truth. There's ears. We think it should work this way, and it seems to be working, but we're not quite sure why. But let's just roll with it. Just give it the launch codes

Kyle Mountsier  1:12  
from working, I can tell you, from working with developers, there is this certain, like, I don't know, try that. It might work like that just happens on a now, like, on a regular basis. Nada, what were you gonna say?

Speaker 1  1:23  
Can I just jump in here? Because I was doing show notes this morning, writing up that story, and one I had to ask GPT, like, seven times, what does this mean? And then I almost asked Kyle you to check them to make sure that, like, I wasn't, like, misrepresenting everything. So it's good to hear good.

Paul J Daly  1:40  
I did the old explain quantum computing to me, like I'm eight years old to GBT. That did help. But there's still gaps. So many gaps, there's still gaps. Okay, well, either way, we're trying to fill in the gaps in our little corner of the universe. One of the ways we do that is through our Quick Shot 30 minute webinars. We have one coming up next week. It's with our friends at automotive automotive mastermind. We're talking about service to sales process and how we can scale those, and some strategies to scale those. It's, it's a big thing, right? There's a lot that can be gained through this area. So go to asotu.com sign up for the webinar. You'll get the recording. If you can't be there live, if you can be there live, be there live, because Kyle and I were there live, and we have, yeah, I mean, the questions

Kyle Mountsier  2:23  
look, if you're not, every single dealer that I talk to is trying to figure this one out. And some are like, does it work? Does it not? Some are all the way in it, it is. Some have figured it out. I'm telling you. Well, we got Shane. He's gonna, he's figured it out. He's gonna tell us how it is. He's

Paul J Daly  2:40  
gonna tell you how he does 30 to 45 cars a month at a BMW dealership. So that's impressive. That's, that's, that's the kicker, right there. We also have, we didn't, we didn't mention this a lot, but next week is going to be our fourth annual year end extravaganza. We have a fourth things. My gosh, that's a deal. Felix, we've been so if you can't see the graphic, it's amazing. It's a snow globe with Santa being pulled in like Chevy chases, national lampoons, Christmas vacation station wagon. It's a beautiful thing. We're gonna have Ryan, Ryan Warman, Lady Bozar, Liza Borches, Ed Roberts, a whole bunch of guests on this show. It's going to be an hour. It's going to be a ton of fun. It's going to be live streamed on December 19. It's a little holiday special. It's the holiday special. I like it. I do too. It's going to be so fun. Let's get into some news. Let's do it. General Motors, you may have heard this, already decided to shut down its cruise Robo taxi division after years of significant investment and a lot of high hopes. At one point, they were like, this is going to be a $50 billion revenue opportunity. I remember what happened with the stock

Speaker 2  3:46  
when they said that it was, but, yeah, but, you

Paul J Daly  3:50  
know, they're saying, nah, their shares, actually, shares went up again during the announcement, reflecting all the investor relief over the fact that they've been they've spent about 10 billion so far in development. They've had issues. Cruise, here's an interesting thing. Cruise employees were notified of this, right? They have a whole division department working on this stuff. They were notified via a Slack message linking to and the Slack message was just basically a link to a press release, so that's a rough one. That's a rough one, and that the press release was titled, I don't have much comment on that, other than my laugh, yeah. GM, where we focus autonomous driving development on personal vehicles. So obviously, that's a tough way to go. To be notified. Operational layoffs, obviously, all expected. They're planning to integrate some of their cruise talent into their driver assistance technology, which makes all the sense doubling down on, you know what happens when they call it super cruise GM, CEO Mary Barra defended the decision, stating, we looked at the amount of money to deploy a robot taxi business to maintain that business. It's quite a bit of capital. A robot botaxi business is not GMS core business. So it feels like we've, we've done that little dance, and now we're back to, you know, they close the battery plant. They do all the So, yep, I

Kyle Mountsier  5:10  
think there's two things to note here. One, like, you know, kudos for finding your core business, right? You're gonna see these others that are gonna pop up and lay over, or they're going to be real startups that go ground up with this technology, you know. But after Tesla literally came out a few weeks ago and was like, we're going all in on this. Oh, yeah. It's shocking to me to not see GM follow suit, but I will say, you know, and this was my comment, I think on Steve Greenfield's post is like being a startup takes some I mean, like, Cruise was a startup inside of a very big business, and being a startup takes a ton of resiliency, both in the stock market internally, from like a founder focus mode, right? Like that is not something that's native to these legacy orgs and so no, kind of, like, very difficult, lot of pressures there. I can't imagine trying to do something like that without spinning it off like that's why you see a brand like VW completely spin off Scout, because it takes founder focus and like, a totally different mentality to do that type of thing. And, and, yeah, you're gonna blow a lot of money along the way, so we'll

Paul J Daly  6:29  
see what word that comes to mind is fortitude, yeah, and that's what you think of when you think of publicly traded stocks. You don't have much fortitude past a quarter or two, right? It just takes longer than that to build something. Obviously, the announcement that has announcement that Tesla made also this week saying that they will be deploying a robo taxi fleet. They are going to be using ver like remote drivers to intervene if necessary, because the their cars don't have the steering wheels and all that stuff. Well, they might use like model threes, but it's going to be fully owned, fully vertical, an app like Uber, like app where you can order the vehicle. So probably best to let them, you know,

Speaker 2  7:10  
figure it out. Figure it out. Come around and seven years, like you did with the EVS. Yeah, yeah, absolutely,

Paul J Daly  7:15  
absolutely, all right. Speaking of figuring it out, segway dealers feel like to figure it out, we touched on this story earlier with consumer sentiment, or small business owner sentiment is on the rise. We asked the question just two days ago. I wonder what dealer sentiments going to do, and now the latest q4 2024, Cox automotive dealer Sentiment Index brings a wave of optimism amongst us, dealers, reflecting improving confidence in the industry, despite the lingering challenges in the current market. Basically, scores are from one to 100 scores above 50 indicate more dealers view conditions as strong or positive, rather than weak or negative. That makes sense. The Market Outlook Index rose to 54 which is a substantial leap from the same quarter last year, which was 42 largest quarterly surge in the history of the report. Dealers credit political clarity and potential economic measures like tax rebates for the boost franchise dealers are more optimistic index of 50 compared to the independent used only dealers, which are still at 39 they're always a little lower. EV sales sentiment remains low at 43 with an Outlook to decline to 35 so they're saying EV sales less people are optimistic, and they're expecting even fewer people to be optimistic. Top concerns in q2 in q4 this year, uh, economic conditions, high interest rates, weak. Market conditions, the political climate is a much lower concern now, and rising expenses also declining. Interest rates, market conditions, here's a quote from Jonathan smoke. We haven't heard from Jonathan in too long, and now he's like the Economist. He's, you know, he's over all the verticals. He's just fancy, like, we miss you, Jonathan. But he said the recent resolution of political uncertainty has cleared the path for a more optimistic outlook on future auto market conditions. Yeah.

Kyle Mountsier  9:10  
I mean, this is a, you know, it's going to be a similar trend every four years. But, you know, we we saw over the last year, obviously, because we came out of those COVID high profits, a bunch of decline. We saw a couple jumps in a quarter here too. But this is a massive jump. I think, you know, obviously dealers are excited about the change in economic policy and the potential for interest rates to start dropping, as the Fed has said, that obviously drives, you know, decision making in the market for auto purchases, I still think it's like, it's, there's a lot of question marks out there, as I talk anecdotally to dealers, everybody's kind of like, you know, it's a, it's like walking on thin ice type thing right now, like, it could go either way, but I'm excited to see overall sentiment go up. That means, hey, look, it's. Actually going into December, everybody's got kind of like eyes up, so I think we're gonna see that going well,

Speaker 3  10:06  
all right. Speaking of going well, stop segway time. Maybe a little too well, maybe

Kyle Mountsier  10:12  
a little too well. So Google has unveiled Willow, its latest quantum computing chip, claiming a monumental breakthrough in what's called error correction and computation speed. However, experts remain cautious, pointing out that quantum computing still lacks practical, real world applications. So what happened is basically, Willow has solved a complex problem that could take today's current super, super computers up to 10 septillion years in just over five minutes. I got questions on how they got to that problem, though that up. But So the big thing that they're that they've figured out is reducing the numbers of errors that the quantum computer, uh, computing actually is or increasing the number of errors it's able to resolve quickly. So qubits, being units of information, and quantum computing, capable of existing as 01 or a superposition of both simultaneously, which is the big trick, and obviously the error correction. You know, we've had quantum computing. It's just, can we correct these errors fast enough? As they come up, because they compound, the more decisions that the engine is making in real time, right next to each other, the willow is only 105 qubits, so it's still too small for real world applications, and it still requires, like, a massive room that, or that has near absolute, absolute zero cooling com complications with it. So it's still way far out.

Paul J Daly  11:53  
You guys see the whole thing. We had a picture of the chip up. But when you see this loud machine together, it looks like, I don't know, something from the matrix, and it

Kyle Mountsier  12:03  
absolutely Marvel. But we were talking last night like the reality is, is, if you go back to the original computer, you know, 5060, years ago, big thing in a room fans exhaust, right? Yep. Similar type of like potential over the next 20 to 30 years to get us to, you know, a much smaller thing that can fit in the size of a pocket. It's

Paul J Daly  12:25  
crazy to think about. I mean, I asked chat GPT. I was like, can you explain quantum computing to me, like I'm five? And then it did. I was like, well, maybe, like I'm 10, and it gave me a little bit more of a example. And the reality is, is that it's hard to understand, but it like I was just thinking as you were talking. I was like, what illustration is helpful? And I was thinking, like, could with the error correction? I was like, it's like traction control. Imagine you have a car that can go so fast, but it's going to spin off the road. Yeah. So the key is that, how can you, because the laws of physics are going to start to fight against it, how can you build a traction control system that will keep it on the road, right? Yep. And so it's like, the error correction is kind of like traction control. It can keep going and get to where it's going. I don't know, but you're gonna look back to this podcast now that we're memorializing this, and we're gonna be like, can you believe, listen to how we talked about it 10 years, how

Speaker 2  13:18  
we talked about it. It'll just be a regular thing at some point. I think, you know, and, and the the reality is, is what this is going to do for, especially things like Bitcoin, Metaverse, AI, things that have hard times computing. This is where there's, there's just like the sky is the limit.

Paul J Daly  13:38  
Yeah. I mean, how does this apply to you today. I think one of the things this ties back to is, how many years, oh, here's a comment from Kelly on the live stream, how many years did you say Willow could save? Is that a real number? Yes,

Kyle Mountsier  13:53  
10 septillion. It's a real number. How they came up with that number? It's what they used to calculate that. It's like

Paul J Daly  13:59  
carbon dating. It's like, how do you really know that that's 100 million years old? Like, do you really know same thing? I don't know, Kelly, but the reality is, like, we're trying to stay on top of the technology that's happening. A lot of that right now is happening in AI, happening on, you know, regular old computers, like our phones and things. That's why we have a newsletter about AI specifically and its application to automotive industry and a little bit broader, it's right. We want you to be on top of it. You can get that email at auto industry.ai, and as far as steptillion things I don't know anything about that, it's fun to say. It's fun, regardless of really, after thinking through that, we have some really basic things that we can do today to help our businesses grow and take care of our people. Like attention to the blocking and tackling and the people we'll see you tomorrow.

Unknown Speaker  14:46  
You.

Transcribed by https://otter.ai

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