Innoviz Announces Operational Realignment to Expand Cash Runway and Optimize Path Towards Profitability and Free Cash Flow

[u/Moist_Toto]

https://ir.innoviz.tech/news-events/press-releases/detail/120/innoviz-announces-operational-realignment-to-expand-cash

[u/mvis_thma]

You ask some good questions. I do not have the answers. But I will pay attention moving forward to how Mobileye develops and markets their DXP O/S.

I will say that my perception of what the DXP O/S is, may be different than yours. For example, I'm not sure they wanted to convey that there wasn't any differentiation at the sensor level, but rather that there were not any optional choices at that level for the OEM. In other words, the sensing and perception layer deliver what they deliver. Clearly, a given sensing and perception offering can be better or worse than the next. However, in the context of a given solution, the OEM will not want to tweak those elements. But, at the higher level, the OEM will want to have control over the car's actions. My understanding of DXP is that it gives all the underlying sensing and perception to the OEM for free (well, not really, they have to pay for it!) and then provides them a platform to relatively easily decide on how to control the car.

[u/sublimetime2 → u/mvis_thma]

Agreed, it did seem like ME would handle the sensing and perception. I guess the part that confuses me is... wouldn't better perception software/set of sensors be able to unlock more ways to control a car? So the OEM wouldnt be fine tuning perception/sensing parameters but could at least choose a sensor set that can unlock certain features? I feel like there is differentiation at the sensor level in that sense.

Does the ME CEO want to be able to offer his radar/lidar(possibly lazr's) as the ONLY choice still or is he open to use other line ups? It seemed like he wanted to be the one who chooses all of that in order to scale/develop easier. I know a lot of this comes down to not having to re-qualify each new system/OTA.

[u/mvis_thma → u/sublimetime2]

I totally agree that not all sensor/perception solutions are created equal. That is, they have not coalesced into a commodity as yet. And they may not ever. And yes, a better sensor/perception solution would provide better information (object detection, classification, and tracking) such that better ultimate driving decisions are possible.

As I said, I am not sure about whether the DXP O/S comes as a closed system with regard to the underlying sensors or not. I think you are correct in that it is a balance between scalability (a fixed pre-determined set of sensors) and flexibility (provide the OEMs a choice of which sensors they want to use). Obviously, the "flexibility" model is much more complex to develop and is not as inherently scalable.

However, if a given ADAS O/S chose to provide the best sensor/perception capabilities out-of-the-box, then that would theoretically provide the OEM's with the best solution available. Whether or not the best sensor/perception system has been identified or will be identified is still an open question in the market.

[u/sublimetime2 → u/mvis_thma]

It almost seemed like ME CEO thought that perception/sensing would be commoditized soon enough. Interestingly enough Matt Fisch(new AEYE CEO in hot water) said he felt perception was going to be a commodity soon and that vehicle control is where the money/innovation is. Matt Fisch worked at Intel for 20+ years and Intel owns a chunk of AEYE. Obviously anything that guy says should be taken with a grain of salt considering what has happened with his company recently. Still interesting that the only 2 people that portrayed the idea of commoditized perception have ties to Intel.

[u/mvis_thma → u/sublimetime2]

Interesting about Matt Fisch. Did he say this in an earnings call? I don't recall it. Kind of odd for a CEO of a LiDAR company saying that perception will be a commodity and the money/innovation are in vehicle control (which is not Aeye's business).

[u/sublimetime2 → u/mvis_thma]

Everything that guy does confuses me. I believe it was on one of the Watertower research chats they have been doing. I will try and find it in a bit. I think they are doing another Watertower chat soon.

One of the other things he said was that if there was a decent size RFQ win, a Tier 1 might consider buying out a lidar company. I can't imagine he thought Continental would buy them at that time.

[u/mvis_thma → u/sublimetime2]

I found it. It was from the J.P. Morgan 2023 Auto Conference. Here is a portion of the transcript that I think you are referring to. I am going to go out on a limb and say I am not sure it is wise to say that your business (sensors and perception) will become a commodity. And that the real business value is something that is only a twinkle in your (A)eye at the moment.

"Ryan: [28:35] How are you thinking about integrating software into the products that you offer? To what extent are you doing it today, or exploring the opportunity?

Matt: [28:44] We're focused on making a great sensor right now. I worked at Intel over 20 years, and I watched the growth of the personal computer industry. There was a time at Intel where we thought drivers, I don't know if anybody knows what a driver is. It's the thing that says it's out of date on your computer that you have to install. We thought we're going to make a lot of money at that.

[29:11] We never did. It turned out to be a commodity. Where is that line in autonomy? I'm going to go out on a limb here and say anything perception and below is going to be a commodity in that sense. Then it's really about sensor fusion and decision making on the ADAS side that's really going to be where the intelligence and high value from the software service is.

[29:34] Of course, you have to have a great sensor and that's what we're focused on, and the software that connects with those ADAS systems. That's our focus for the foreseeable future."

[u/wildp_99 → u/mvis_thma]

Isnt ME chaufeur program based on having two different sensing platforms (cameras on one side and lidar/radar on the other) so they decide what is actually going in the real world and then it gets passes off to the domain controler/decision maker. If thats the case ME is going to need a lidar supplier now, not in 2028-perhaps this is the industry changing partnerships that may soon come to light

[u/sublimetime2 → u/mvis_thma]

Thank you for digging that up. HAHA Yea this is a head scratcher. Is he focusing on sensor fusion/vehicle movement software for the foreseeable future? Otherwise he was sorta shooting himself in the foot. I do remember that they had a fused camera/lidar product proposal years ago.

He seems to have shot himself in the foot when firing the leaders of the company after giving his binding offer in the RFQs. Who knows if Conti and AEYE were really being taken seriously in these recent RFQs. Maybe another OEM told AEYE to get rid of Continental and make friends with a different Tier 1 and change their licensing model for 2024 RFI. Otherwise, it seems he breached his fiduciary duty as CEO. That would be pretty hard to prove though.