Tesla's Insurmountable FSD Advantage (Patreon)

This is quite profound and WALL ST HAS NO CLUE - as usual.

Tesla brought up an interesting challenge with Full Self-Driving (FSD): the main issue now isn’t about talent, data, or computing power, but rather identifying errors.

Why? The software has become so advanced that it takes a long time of testing to actually find a mistake.

This has big implications for Tesla's lead in FSD. Any competitor trying to catch up, even with better technology, will likely face the same problem.

If a competitor reaches Tesla's level of sophistication, they’ll hit the same testing bottleneck. At that point, progress slows down, and they can't overcome it just by throwing more computing power at the problem.

For example, if a competitor hits this bottleneck two years after Tesla, and computing advancements can’t solve it, it’ll be impossible to close that gap.

In other words, catching up would require not only matching Tesla's innovation speed but also being able to test new models faster than Tesla.

This suggests that Tesla might hold onto its advantage in vehicle autonomy much longer than expected, giving them a significant cost-per-mile edge. Tesla could build a massive autonomous ride-hailing network before anyone else, leaving competitors to fight for the leftovers.

H/t Sanjay inspired by AJ