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‘Elon is gambling’ — How Tesla is proving doubters right on why its robotaxi service cannot scale

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5 months ago

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The very day Elon Musk expanded the boundaries of his three-week-old autonomous ride hailing service in Austin, Joe Tegtmeyer’s Tesla tried to illegally run a railroad crossing just as a locomotive approached.

“The robotaxi did not see that, and the safety observer had to stop the vehicle until the train had passed. So there’s a little bit of work that still needs to be polished up with the software, but otherwise it’s been just an amazing opportunity to see how well the expanded service is working,” he said on Monday in a post on X.

Taking what might have been a life-threatening situation seemingly in stride, Tegtmeyer then argued in favor of Tesla adding more cars to the 10 or so currently on the roads to cut waiting times that had ballooned to 20 minutes.

None of this comes as a surprise to Elias Martinez. One of the earliest Full Self-Driving beta testers, he says Tesla’s software has “come a long way” over the past four years. But he argues all available evidence points to the technology being nowhere near robust enough to support the 10,000 cars Musk claimed in May were possible in theory on day one. 

“These issues prove Tesla should never have launched even with just 10 vehicles,” he tells Fortune. “Yes, it works most of the time, but it blows my mind we’re still seeing issues like FSD running red lights or driving on the wrong side of the road. This shouldn’t be happening on such a regular basis.”

The problem is with each car added, the greater the statistical chance of a collision. Any robotaxi service, Waymo included, needs to be virtually flawless in order to scale the service safely—yet with Tesla there’s no sign of that, according to Martinez.

A distraction from declining sales numbers

The former U.S. Marine hosts the crowd-sourced FSD Community Tracker, the single most sophisticated and reliable form of empirical data collection and analysis on Tesla’s self-driving technology that is publicly available. Car executives like Volkswagen Autonomous Mobility CEO Christian Senger speak highly of it as a benchmark, and even Musk—who has his own internal data on disengagements that he refuses to share—singled it out as proof the company is making progress.

Developed with the help of a Canadian Tesla driver, his tracker is simple and easy to use: during a trip, FSD beta testers like Martinez catalog in real time problems that arise directly into the vehicle’s onboard infotainment system, where it’s stored until it can be uploaded to the internet. Drivers are incentivized through weekly recognition of the top contributors, turning it into something of a friendly competition.

Currently, its data shows even the latest FSD version from Tesla results in a critical disengagement roughly every 340 miles between both city and highway at present. Called 13.2.9, it rolled out in May just weeks before the Austin service launched. “You sometimes hear Elon saying, ‘we’re having a hard time finding disengagements.’ That is such BS,” Martinez adds.

Although the Austin robotaxi fleet is believed to be using a newer iteration, in Martinez’s estimation it closely approximates the performance of the version released to the public since they reveal similar shortcomings, such as driving in the wrong lane.

He believes Tesla has been more focused on meeting Musk’s June launch timetable come hell or high water than on perfecting the actual underlying technology. Since demand for his EVs dropped sharply in the first half of the year and his Cybertruck has proven to be a commercial flop, the CEO needs something to keep investors happy. 

“This feels like a distraction from the declining sales numbers,” he said, adding “Elon is gambling.”

In the meantime, the last major update Tesla owners received, v13.2.1, launched to the public seven months ago.

The company did not respond to a request to comment on this or any other point related to its FSD self-driving technology.

Musk stakes future on game-changing technology

When Tesla hosts its second-quarter earnings call after the close of markets on Wednesday, Musk will face a barrage of questions around the roadmap of his robotaxi pilot. At press time, the top-ranked issue is the performance he’s seen so far in Austin and how soon the service can scale in terms of new cities and more vehicles.  

Investors have a lot of money riding on FSD, and will want answers as to how soon 10 cars in Austin can grow to thousands across the country. Only then will they get a feeling for how long it will take Tesla to leapfrog Waymo, going from zero unsupervised miles currently to the 100 million just recorded by its archrival.

The technology could prove a game changer, especially for marginalized communities like the handicapped. Jessie Wolinsky, a legally blind millennial who video blogs about her experience slowly losing her eyesight, told California regulators she was grateful for being part of Waymo’s trusted rider program.

“It has provided me with a feeling of safety that I’ve never had before.,” she said at an August 2023 hearing shortly before the state voted to greenlight the technology. “I get into a Waymo vehicle, not only am I able to get to where I need to be on my own terms, which is huge, but I am able to do so without the fear of being harassed, groped, assaulted, attacked or potentially worse.”

Musk staked the company’s fortune on the robotaxi service, which now must generate the profits needed to fund his Optimus robot program currently under development. 

If you want trust, you need full transparency

But autonomous driving at its heart is a technology steeped in statistical eventualities. How many cars are operating at the same time and how many miles do they collectively log before the first accident occurs—thousands? Millions? More? 

Flying may seem like a dangerous endeavor to some, but there is no form of mass transportation safer since 99.9999% of flights land without incident. Companies like Tesla and Waymo now need to demonstrate a similar level of reliability despite variables far exceeding a plane flying through a relatively less crowded sky. 

For that you need extensive, detailed data — the kind that Martinez collects with the help of the Tesla community. If you ask the company for answers, though, you’ll get none — just the opposite in fact. Instead of attempting to gain public trust through transparency, Musk’s company is currently pressing federal regulators to bury its robotaxi safety record, claiming the data must remain confidential for business reasons. 

“This shouldn’t be proprietary. You’re driving on public roads so the data needs to be made available,” he said. “The fact that they’re hiding data should tell you everything you need to know. If you really want trust, you have to have full transparency.”

Instead, Musk only releases a quarterly crash statistic for his FSD beta program, now called FSD Supervised: for the first three months of this year Teslas drove 7.44 million miles before an accident. While this is a sterling result compared to the 700,000 miles for the average American driver, these are not robotaxi miles—they rely on drivers intervening before a collision ensues. 

And even these figures, Martinez argues, should be vetted independently by regulators before being taken as credible: “If you leave it to a company, they will filter it to fit their narrative.”

Not ready to scale safely

Meanwhile, Tesla’s response seems to laugh it all off. On Monday, Musk thought it would be funny to expand the area covered by its three-week-old Austin robotaxi service to resemble a giant penis when seen on a map. 

“Harder, better, faster, stronger,” the $1 trillion company wrote on Monday, a double entendre referencing the synth pop track of the same name by Daft Punk, a duo appropriately known for performing as robots. Musk approvingly reposted the phallus-shaped service map, adding the fare would now be hiked to $6.90 per ride from $4.20 previously, both numbers the 54-year old often employs for comical effect.

In short, the geographic expansion seemed more like a PR stunt more than anything else. The number of cars collecting fares has not appeared to change; Tesla continues to limit the number of people that can use the service; and human safety monitors still sit in the vehicle.

On the prediction site Polymarket, speculators have put the probability Tesla will have a fully functioning robotaxi service anywhere in the country at anytime during the rest of this year at just 42%, down from a high of 86% one month ago.

“It shows they’re not ready to scale, and if they did try to prematurely scale, they’re going to run into problems,” Martinez says. “Then you’re putting people at risk. Yes, maybe it’s a lower risk compared to a drunk driver, but it’s still a risk.”





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Senate Dems’ plan to fix Obamacare premiums adds nearly $300 billion to deficit, CRFB says

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9 hours ago

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December 5, 2025

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The Committee for a Responsible Federal Budget (CRFB) is a nonpartisan watchdog that regularly estimates how much the U.S. Congress is adding to the $38 trillion national debt.

With enhanced Affordable Care Act (ACA) subsidies due to expire within days, some Senate Democrats are scrambling to protect millions of Americans from getting the unpleasant holiday gift of spiking health insurance premiums. The CRFB says there’s just one problem with the plan: It’s not funded.

“With the national debt as large as the economy and interest payments costing $1 trillion annually, it is absurd to suggest adding hundreds of billions more to the debt,” CRFB President Maya MacGuineas wrote in a statement on Friday afternoon.

The proposal, backed by members of the Senate Democratic caucus, would fully extend the enhanced ACA subsidies for three years, from 2026 through 2028, with no additional income limits on who can qualify. Those subsidies, originally boosted during the pandemic and later renewed, were designed to lower premiums and prevent coverage losses for middle‑ and lower‑income households purchasing insurance on the ACA exchanges.

CRFB estimated that even this three‑year extension alone would add roughly $300 billion to federal deficits over the next decade, largely because the federal government would continue to shoulder a larger share of premium costs while enrollment and subsidy amounts remain elevated. If Congress ultimately moves to make the enhanced subsidies permanent—as many advocates have urged—the total cost could swell to nearly $550 billion in additional borrowing over the next decade.

Reversing recent guardrails

MacGuineas called the Senate bill “far worse than even a debt-financed extension” as it would roll back several “program integrity” measures that were enacted as part of a 2025 reconciliation law and were intended to tighten oversight of ACA subsidies. On top of that, it would be funded by borrowing even more. “This is a bad idea made worse,” MacGuineas added.

The watchdog group’s central critique is that the new Senate plan does not attempt to offset its costs through spending cuts or new revenue and, in their view, goes beyond a simple extension by expanding the underlying subsidy structure.

The legislation would permanently repeal restrictions that eliminated subsidies for certain groups enrolling during special enrollment periods and would scrap rules requiring full repayment of excess advance subsidies and stricter verification of eligibility and tax reconciliation. The bill would also nullify portions of a 2025 federal regulation that loosened limits on the actuarial value of exchange plans and altered how subsidies are calculated, effectively reshaping how generous plans can be and how federal support is determined. CRFB warned these reversals would increase costs further while weakening safeguards designed to reduce misuse and error in the subsidy system.

MacGuineas said that any subsidy extension should be paired with broader reforms to curb health spending and reduce overall borrowing. In her view, lawmakers are missing a chance to redesign ACA support in a way that lowers premiums while also improving the long‑term budget outlook.

The debate over ACA subsidies recently contributed to a government funding standoff, and CRFB argued that the new Senate bill reflects a political compromise that prioritizes short‑term relief over long‑term fiscal responsibility.

“After a pointless government shutdown over this issue, it is beyond disappointing that this is the preferred solution to such an important issue,” MacGuineas wrote.

The off-year elections cast the government shutdown and cost-of-living arguments in a different light. Democrats made stunning gains and almost flipped a deep-red district in Tennessee as politicians from the far left and center coalesced around “affordability.”

Senate Minority Leader Chuck Schumer is reportedly smelling blood in the water and doubling down on the theme heading into the pivotal midterm elections of 2026. President Donald Trump is scheduled to visit Pennsylvania soon to discuss pocketbook anxieties. But he is repeating predecessor Joe Biden’s habit of dismissing inflation, despite widespread evidence to the contrary.

“We fixed inflation, and we fixed almost everything,” Trump said in a Tuesday cabinet meeting, in which he also dismissed affordability as a “hoax” pushed by Democrats.​

Lawmakers on both sides of the aisle now face a politically fraught choice: allow premiums to jump sharply—including in swing states like Pennsylvania where ACA enrollees face double‑digit increases—or pass an expensive subsidy extension that would, as CRFB calculates, explode the deficit without addressing underlying health care costs.



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Netflix–Warner Bros. deal sets up $72 billion antitrust test

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9 hours ago

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December 5, 2025

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Netflix Inc. has won the heated takeover battle for Warner Bros. Discovery Inc. Now it must convince global antitrust regulators that the deal won’t give it an illegal advantage in the streaming market. 

The $72 billion tie-up joins the world’s dominant paid streaming service with one of Hollywood’s most iconic movie studios. It would reshape the market for online video content by combining the No. 1 streaming player with the No. 4 service HBO Max and its blockbuster hits such as Game Of Thrones, Friends, and the DC Universe comics characters franchise.  

That could raise red flags for global antitrust regulators over concerns that Netflix would have too much control over the streaming market. The company faces a lengthy Justice Department review and a possible US lawsuit seeking to block the deal if it doesn’t adopt some remedies to get it cleared, analysts said.

“Netflix will have an uphill climb unless it agrees to divest HBO Max as well as additional behavioral commitments — particularly on licensing content,” said Bloomberg Intelligence analyst Jennifer Rie. “The streaming overlap is significant,” she added, saying the argument that “the market should be viewed more broadly is a tough one to win.”

By choosing Netflix, Warner Bros. has jilted another bidder, Paramount Skydance Corp., a move that risks touching off a political battle in Washington. Paramount is backed by the world’s second-richest man, Larry Ellison, and his son, David Ellison, and the company has touted their longstanding close ties to President Donald Trump. Their acquisition of Paramount, which closed in August, has won public praise from Trump. 

Comcast Corp. also made a bid for Warner Bros., looking to merge it with its NBCUniversal division.

The Justice Department’s antitrust division, which would review the transaction in the US, could argue that the deal is illegal on its face because the combined market share would put Netflix well over a 30% threshold.

The White House, the Justice Department and Comcast didn’t immediately respond to requests for comment. 

US lawmakers from both parties, including Republican Representative Darrell Issa and Democratic Senator Elizabeth Warren have already faulted the transaction — which would create a global streaming giant with 450 million users — as harmful to consumers.

“This deal looks like an anti-monopoly nightmare,” Warren said after the Netflix announcement. Utah Senator Mike Lee, a Republican, said in a social media post earlier this week that a Warner Bros.-Netflix tie-up would raise more serious competition questions “than any transaction I’ve seen in about a decade.”

European Union regulators are also likely to subject the Netflix proposal to an intensive review amid pressure from legislators. In the UK, the deal has already drawn scrutiny before the announcement, with House of Lords member Baroness Luciana Berger pressing the government on how the transaction would impact competition and consumer prices.

The combined company could raise prices and broadly impact “culture, film, cinemas and theater releases,”said Andreas Schwab, a leading member of the European Parliament on competition issues, after the announcement.

Paramount has sought to frame the Netflix deal as a non-starter. “The simple truth is that a deal with Netflix as the buyer likely will never close, due to antitrust and regulatory challenges in the United States and in most jurisdictions abroad,” Paramount’s antitrust lawyers wrote to their counterparts at Warner Bros. on Dec. 1.

Appealing directly to Trump could help Netflix avoid intense antitrust scrutiny, New Street Research’s Blair Levin wrote in a note on Friday. Levin said it’s possible that Trump could come to see the benefit of switching from a pro-Paramount position to a pro-Netflix position. “And if he does so, we believe the DOJ will follow suit,” Levin wrote.

Netflix co-Chief Executive Officer Ted Sarandos had dinner with Trump at the president’s Mar-a-Lago resort in Florida last December, a move other CEOs made after the election in order to win over the administration. In a call with investors Friday morning, Sarandos said that he’s “highly confident in the regulatory process,” contending the deal favors consumers, workers and innovation. 

“Our plans here are to work really closely with all the appropriate governments and regulators, but really confident that we’re going to get all the necessary approvals that we need,” he said.

Netflix will likely argue to regulators that other video services such as Google’s YouTube and ByteDance Ltd.’s TikTok should be included in any analysis of the market, which would dramatically shrink the company’s perceived dominance.

The US Federal Communications Commission, which regulates the transfer of broadcast-TV licenses, isn’t expected to play a role in the deal, as neither hold such licenses. Warner Bros. plans to spin off its cable TV division, which includes channels such as CNN, TBS and TNT, before the sale.

Even if antitrust reviews just focus on streaming, Netflix believes it will ultimately prevail, pointing to Amazon.com Inc.’s Prime and Walt Disney Co. as other major competitors, according to people familiar with the company’s thinking. 

Netflix is expected to argue that more than 75% of HBO Max subscribers already subscribe to Netflix, making them complementary offerings rather than competitors, said the people, who asked not to be named discussing confidential deliberations. The company is expected to make the case that reducing its content costs through owning Warner Bros., eliminating redundant back-end technology and bundling Netflix with Max will yield lower prices.



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The rise of AI reasoning models comes with a big energy tradeoff

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10 hours ago

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December 5, 2025

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Nearly all leading artificial intelligence developers are focused on building AI models that mimic the way humans reason, but new research shows these cutting-edge systems can be far more energy intensive, adding to concerns about AI’s strain on power grids.

AI reasoning models used 30 times more power on average to respond to 1,000 written prompts than alternatives without this reasoning capability or which had it disabled, according to a study released Thursday. The work was carried out by the AI Energy Score project, led by Hugging Face research scientist Sasha Luccioni and Salesforce Inc. head of AI sustainability Boris Gamazaychikov.

The researchers evaluated 40 open, freely available AI models, including software from OpenAI, Alphabet Inc.’s Google and Microsoft Corp. Some models were found to have a much wider disparity in energy consumption, including one from Chinese upstart DeepSeek. A slimmed-down version of DeepSeek’s R1 model used just 50 watt hours to respond to the prompts when reasoning was turned off, or about as much power as is needed to run a 50 watt lightbulb for an hour. With the reasoning feature enabled, the same model required 7,626 watt hours to complete the tasks.

The soaring energy needs of AI have increasingly come under scrutiny. As tech companies race to build more and bigger data centers to support AI, industry watchers have raised concerns about straining power grids and raising energy costs for consumers. A Bloomberg investigation in September found that wholesale electricity prices rose as much as 267% over the past five years in areas near data centers. There are also environmental drawbacks, as Microsoft, Google and Amazon.com Inc. have previously acknowledged the data center buildout could complicate their long-term climate objectives. 

More than a year ago, OpenAI released its first reasoning model, called o1. Where its prior software replied almost instantly to queries, o1 spent more time computing an answer before responding. Many other AI companies have since released similar systems, with the goal of solving more complex multistep problems for fields like science, math and coding.

Though reasoning systems have quickly become the industry norm for carrying out more complicated tasks, there has been little research into their energy demands. Much of the increase in power consumption is due to reasoning models generating much more text when responding, the researchers said. 

The new report aims to better understand how AI energy needs are evolving, Luccioni said. She also hopes it helps people better understand that there are different types of AI models suited to different actions. Not every query requires tapping the most computationally intensive AI reasoning systems.

“We should be smarter about the way that we use AI,” Luccioni said. “Choosing the right model for the right task is important.”

To test the difference in power use, the researchers ran all the models on the same computer hardware. They used the same prompts for each, ranging from simple questions — such as asking which team won the Super Bowl in a particular year — to more complex math problems. They also used a software tool called CodeCarbon to track how much energy was being consumed in real time.

The results varied considerably. The researchers found one of Microsoft’s Phi 4 reasoning models used 9,462 watt hours with reasoning turned on, compared with about 18 watt hours with it off. OpenAI’s largest gpt-oss model, meanwhile, had a less stark difference. It used 8,504 watt hours with reasoning on the most computationally intensive “high” setting and 5,313 watt hours with the setting turned down to “low.” 

OpenAI, Microsoft, Google and DeepSeek did not immediately respond to a request for comment.

Google released internal research in August that estimated the median text prompt for its Gemini AI service used 0.24 watt-hours of energy, roughly equal to watching TV for less than nine seconds. Google said that figure was “substantially lower than many public estimates.” 

Much of the discussion about AI power consumption has focused on large-scale facilities set up to train artificial intelligence systems. Increasingly, however, tech firms are shifting more resources to inference, or the process of running AI systems after they’ve been trained. The push toward reasoning models is a big piece of that as these systems are more reliant on inference.

Recently, some tech leaders have acknowledged that AI’s power draw needs to be reckoned with. Microsoft CEO Satya Nadella said the industry must earn the “social permission to consume energy” for AI data centers in a November interview. To do that, he argued tech must use AI to do good and foster broad economic growth.



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