Monday, November 30, 2015

Jeff Bezos's Blue Origin Launches and Lands a Rocket for the First Time (BusinessWeek)

  • New Shepard rocket flies to space before landing back on Earth
  • Reusable rockets are key to cutting the cost of space travel
Image result for Jeff Bezos blue rocket

Jeff Bezos’s space-exploration company Blue Origin LLC achieved a key milestone: sending a rocket into space and then landing it safely back on Earth.

The flight and recovery of the New Shepard vehicle beat Elon Musk’s SpaceX in the quest to build a reusable rocket, a central goal for companies trying to cut the cost of lofting freight and astronauts into Earth’s orbit. SpaceX is working to recover boosters on an oceangoing barge so they can fly again, but hasn’t yet succeeded.

Blue Origin’s craft took off Monday from the company’s Texas launch site, reached an altitude of 329,839 feet (100 kilometers) and then landed vertically atop a pillar of flame from its motor. A Blue Origin video showed the rocket swaying gently from side to side as its four legs flexed in preparation for touchdown amid a swirl of billowing dust.

“Now safely tucked away at our launch site in West Texas is the rarest of beasts -- a used rocket,” Bezos, who is also chief executive officer of Inc., said in a statement. “Full reuse is a game changer, and we can’t wait to fuel up and fly again.”

Musk offered kudos to Bezos and Blue Origin in a tweet, writing “Congrats to Jeff Bezos and the BO team for achieving” vertical takeoff and landing.

SpaceX Ahead

SpaceX remains ahead of Blue Origin in winning commercial business. The company, formally known as Space Exploration Technologies Corp., is vying for its second award from NASA to ferry cargo to the International Space Station. In 2014, SpaceX and Boeing Co. shared the first contract to operate manned flights to the orbiting lab.

Recycling rockets will be a crucial step for the viability of for-profit space companies. For decades, the National Aeronautics and Space Administration recovered capsules by parachute, as Blue Origin did with the one atop New Shepard, but typically treated the boosters as expendable.  

The technical challenges remain daunting: A vertical touchdown means ensuring that a rocket can survive the heat of re-entering Earth’s atmosphere, navigate toward the landing zone and then decelerate from traveling thousands of miles per hour so it settles in softly -- and undamaged.

Thursday, November 19, 2015

Is the U.S. Government Still Rocking HP TouchPads?

A FOIA request reveals that the U.S. government has made some amazingly weird tablet shopping choices.

HP TouchPad
WebOS lives on, apparently, at the U.S. General Services Administration.

Last month, Web designer Allan Lasser of MuckRock, a portal for aggregating government data, filed a Freedom of Information Act request asking for all of the models of computer that "have been" and "are currently in use" at the GSA. (The GSA buys all of the stuff for the civilian divisions of our government.)

The results came back a few days ago, and were posted to MuckRock. (I heard of this via "Taylor Swift.") By and large, the GSA's purchases are pretty much like any large enterprise: a slew of Dell Latitudes and OptiPlexes, as well as some MacBooks for people who, you know, like that sort of thing.

The list includes Dell Inspiron 1100 laptops from 2003, but it isn't clear whether those are currently in use or merely have beens. If they're still being used, some (probably extremely frustrated) bureaucrat really deserves an award for being super thrifty with the purchasing budget over the past decade or so.

There are a few amazing mysteries in the list, though.

The GSA bought HP TouchPads, HP's failed WebOS tablet, which was only on sale for a few months in 2011.

It bought the Android 2.2-powered Dell Streak 7. Maybe it came free with purchase of 10,000 laptops?

It bought multiple Windows tablets dating back to 2007, but no iPads until the iPad Air.
What the heck were (are?) the feds using the TouchPads for? Who knows, but for a trip down memory lane, check out the video below.

Wednesday, November 18, 2015

Marriott Buying Starwood in Deal Valued at $12.2 Billion (BusinessWeek)

  • Transaction will create world's largest hotel company
  • Starwood suitors said to include three Chinese buyers
  • Image result for marriott Image result for Starwoods

    Marriott International Inc. is buying Starwood Hotels & Resorts Worldwide Inc. in a deal valued at $12.2 billion to create the world’s largest hotel company, emerging as the surprise winner of a bidding war that reportedly included Hyatt Hotels Corp. and multiple Chinese suitors.

    Marriott offered to pay $2 a share in cash and 0.92 of its own stock for Stamford, Connecticut-based Starwood, the companies said in a statement on Monday. The combined company will operate or franchise more than 5,500 hotels with 1.1 million rooms worldwide.
    “The deal makes sense from a strategic perspective,” Lukas Hartwich, an analyst at real estate research firm Green Street Advisors LLC, said in an e-mail. “Scale matters a lot in the hotel business. The winners in the long run will likely be the ones with the most hotels, in the most locations, at the most price points.”

    The deal is the largest takeover of a hotel company since Blackstone Group LP bought Hilton for $26 billion in 2007. Starwood has been exploring options including a sale since the February departure of longtime head Frits van Paasschen amid criticism he failed to increase the number of properties carrying Starwood’s brands quickly enough. Starwood hired Lazard Ltd. to advise it in April. In addition to competing with one another, hotel companies are also dealing with losing customers to Airbnb Inc.

    At least three Chinese companies were pursuing bids for Starwood, a person with knowledge of the matter said in October. CNBC reported on Oct. 28 that Hyatt was holding takeover talks with Starwood.

    “We’re not selling for cash, we’re selling for stock,” CEO Adam Aron said Monday on a conference call with analysts. “This is the greatest long-term return for shareholders.”
    Cash Flow

    The U.S. hotel industry is in its sixth year of recovery from the recession and is facing supply surges in cities including New York and Seattle. In the Americas, revenue per available room -- a measure of profitability used by the lodging industry -- increased 6.6 percent this year through September, according to STR Global. Revpar rose 7.6 percent in Europe and 2.9 percent in the Middle East and Africa, while it fell 0.2 percent in the Asia-Pacific region, the lodging-research company said.

    “The economies of scale really matter in the lodging business because higher volumes on the reservation system can drive business to less-occupied properties on a given night,” James Corl, a managing director at real estate private equity firm Siguler Guff & Co., said before the deal was announced. “Reservation-system scale drives both occupancy and rate, and that helps cash flow and operating margins.”

    Starwood shares fell 3.4 percent to $72.45 at 10:31 a.m. in New York. Marriott climbed 2.4 percent to $74.49.

    The total estimated value of the deal to Starwood investors is $79.88 a share, including $7.80 a share for Starwood’s timeshare business. Starwood agreed in October to spin off and sell its timeshare unit to Interval Leisure Group Inc. in a deal valued at about $1.5 billion. That transaction is expected to be completed before Marriott’s purchase of Starwood, according to Monday’s statement.

    Shareholder and regulatory approvals are also needed, and the acquisition is expected to close in mid-2016, the companies said.

    Tuesday, November 17, 2015

    Clinton's Wall Street Donors Say More Than 9/11 Built Their Bond (BusinessWeek)

    • Bernie Sanders blasts her Wall Street funding during debate
    • Former N.Y. senator's terrorism reference gets mixed reaction

    The venture capitalist and Hillary Clinton bundler Alan Patricof was sitting in the audience at Saturday’s Democratic debate in Iowa when the former New York senator started raising her voice and pointing with her right hand.

    "I represented New York on 9/11 when we were attacked,” Clinton said, after rival presidential candidate Bernie Sanders criticized her ties to bankers. "Where were we attacked? We were attacked in downtown Manhattan where Wall Street is. I did spend a whole lot of time and effort helping them rebuild. That was good for New York. It was good for the economy. And it was a way to rebuke the terrorists who had attacked our country.”

    The line triggered rage on Twitter, spite from her rivals and surprise among allies. Patricof, co-founder and managing director of Greycroft LLC, wasn’t sure what to make of Clinton’s suggestion that she has a good relationship with the financial industry because of terrorism.
    “I was confused,” he said Sunday. “I didn’t quite understand.”

    The way he and Clinton’s other Wall Street supporters see it, the connections that bind them are long, deep and nothing to be embarrassed about. As Clinton seeks the Democratic presidential nomination against candidates vowing to break up the biggest U.S. banks, her donors in the financial industry say their relationship doesn’t hinge on a quid pro quo or the September 2001 attacks.

    ‘Simplistic Solutions’

    The hedge-fund manager Marc Lasry, another bundler, said investors like Clinton, who went on to serve as secretary of state under President Barack Obama, because of her determination. “Look, I’ve known Hillary for a long time,” he said. “Whether you are from Wall Street or from Main Street, you respect her because of her intelligence and because she’ll fight for you.”

    H. Rodgin Cohen, who as Sullivan & Cromwell LLP’s senior chairman works on regulation and securities law for banking giants, said Wall Street supports her because she’s qualified to be president -- and because she appreciates finance and nuance. 

    “She rejects simplistic solutions and slogans in favor of comprehensive and thoughtful analysis,” Cohen said, “whether in the financial arena or elsewhere.”

    Clinton has raised millions of dollars from Wall Street over her career, and her campaign committee has been leading the race for cash donations from employees of the biggest banks.

    Patricof thinks the issue of Clinton’s money from Wall Street is as overblown as the uproar over her personal e-mail server. He said that while money can buy influence -- “If I saw dramatic support coming out of the sugar industry, I would think it would have something to do with the benefits in some way of sugar legislation” -- financier donations are something different.

    “It’s where the money is,” he said. “Wall Streeters contribute to political parties.” 

    Sanders’ Criticism

    Clinton, Sanders and Martin O’Malley began their remarks in Des Moines by observing a moment of silence to honor the victims of the terrorist attacks a day earlier in Paris. It was the Democratic candidates’ second debate of the campaign.

    Jennifer Palmieri, a spokeswoman for Clinton, defended the candidate’s terrorism reference and relationship to a hometown industry. “There are times when she’s worked very productively with Wall Street, and 9/11 is an example of that,” Palmieri said. “There were also times when she thought they were going too far or pursuing reckless behavior, and she didn’t hesitate to speak out.”

    Clinton’s Familiarity

    The first part resonates for Erika Karp, a former UBS AG executive who runs Cornerstone Capital Inc., an advisory firm that focuses on sustainable investments. Clinton’s donors like that she recognizes “Wall Street and the global financial markets are an essential element in facilitating global prosperity,” Karp said. 

    But another former UBS executive, 32 Advisors Chief Executive Officer Robert Wolf, said the relationship between Wall Street and Clinton transcends banking. “So, maybe just maybe, the financial-services industry contributes to a candidate based on many other things than his or her profession and may look at many other issues as well,” he said, citing immigration, foreign policy and education. “I know I do.”

    Even so, familiarity plays a role, too. Patricof said Clinton got to know Wall Street figures throughout her years as a New York senator, and established friendships with financial leaders as the first lady, too. 

    “I think perhaps over the years she’s come to appreciate they are pretty smart people,” he said. “Excluding myself.”

    Friday, November 6, 2015

    U.S. grapples with controlling 'cyber-munitions' while recruiting 6,000 new cyber-warriors (TechRepublic)

    The U.S. government is ramping up its digital defenses by recruiting new military coders and examining how best to handle the proliferation of digital weapons.

    Clicks and keystrokes can now crash economies and burn governments faster than fighter jets and firearms.

    So-called 'cyber-munitions' are technological products and protocols with both offensive and defensive capabilities, little-known to the public, and hotly debated by digital security experts. The U.S. government is currently in the process of deciding how to categorize and regulate cyber-munitions.

    Traditional munitions are weapons and technologies like firearms, fighter jets, and bombs that are intended to cause physical, real-world damage. Cyber-munitions are code-based tools that can both cause real-world damage and wreck havoc in the digital realm.

    Cyber-munition development has become a lucrative industry. Aliya Sternstein, writing for government security website Defense One, reported that in October the United States Cyber Command issued a request for proposals from private contractors to fill a $460 million contract that would help the government agency hire over 6 thousand new 'cyber-warriors'. These government-paid hackers will be deployed across 133 defense agencies. While specific assignments will likely be classified, it is widely believed CYBERCOM coders will be charged with fending off attacks from Chinese and Russian-backed groups, and developing and deploying next-generation digital weapons.


    The Stuxnet worm might be the most well-known offensive digital weapon. Discovered in 2010, Stuxnet was a rootkit worm allegedly developed as a part of Operation Olympic Games by the United States or a close ally that targeted industrial computer systems produced by Siemens and used to control the speed of centrifuges used to enrich uranium at Iran's Natanz nuclear facility.

    Stuxnet worked by manipulating the speed of centrifuges at Natanz in ways that were undetectable to Iranian engineers. The malware was well-cloaked and although the worm spread as many do, on the Windows operating system, the virus targeted systems with specific hardware and software profiles suspected by the Western intelligence community to be used on Iranian machines. On the vast majority of infected devices, Stuxnet lay dormant. But on machines that fit the Iranian profile, the code performed a specific and nuanced set of instructions. After the malware carried out its attack, it hid itself and became nearly invisible.

    While Stuxnet is one of the most well-known tactical deployments of weaponized software, the malware is only part of the 'cyber-munitions' equation and may be an outlier that portends the future of cyberwar rather than a barometer of the current state of the industry.

    Defensive capabilities

    "It is important to acknowledge defensive weapons serve a purpose just as much as offensive," said former Department of Homeland Security employee who didn't want to be named. "[Cryptographic systems] are not as sexy [as Stuxnet], but they're just as important."

    The expression 'cyber-munition' dates back to hacker culture of the late-1980s and early 90s and is generally used in relation to cryptographic systems that protect strategically sensitive and often classified information.

    The United States and its allies are proficient at developing and deploying a variety of cryptographic systems, said John Pironti, and much like traditional weapons the U.S. often seeks to degrade and deter rivals from obtaining equivalent capabilities. "We're pretty good at hacking and cracking less sophisticated and older systems," he said, "and we'd like to keep that advantage."

    'Cyber munitions' are typically defined as a part of the Federal Information Processing Standards, a series of 140 cryptographic standards required by the federal government. These standards are commonly referred to in the crypto community as FIPS 140.

    Suite-A and Suite-B are the two types of cryptographic standards defined by the National Security Agency as 'modern cryptography'

    Suite-A cryptographic systems are classified and are only intended to be used by the U.S. government, allies, or contractors with appropriate levels of security clearance. Suite-B cryptographic systems are a set of algorithms that are available to the general public. According to security firm KoolSpan, Suite-B tools consist of four different technical protocols based off of work by Dr. Stephen Kent, a pioneer of widely-used encryption standards.

    Both Suite-A and Suite-B systems are very strong and respected systems, said Pironti. 

    But Suite-A is classified, and, he added with a chuckle, "unless it's based on a public key standard, if the U.S. government is moving algorithms to from Suite A to Suite B they likely know how to get around it."

    So why were 'digital products' removed from the list of so-called cyber munitions? In recent years the United States has been engaged in a policy called Export Control Reform (ECR). The "U.S. Munitions List frankly has too many items on it," said a U.S. government official with knowledge of the situation, "since a lot of these items made the list back in the 1970s and 80s, there are a lot of technologies that have long since gone over to the commercial world."

    In the past, classification of security tools served to limit the distribution of a technical advantage, added Pironti. It is generally assumed by the defense community that today both state and non-state actors are able to obtain high-quality encryption technology.

    Today, said the government official, limiting access to technology and intellectual property serves as political leverage for negotiation in trade and commerce agreements with other states. The official added "if the [technology] item is commercial in nature or of dual-use, then generally the Department of Commerce, not the Department of State, regulates its export. For this reason, a lot of items typically viewed as "cyber weapons," are actually under the Department of Commerce's jurisdiction.

    Category XI of the U.S. munitions list addresses military electronics under State Department jurisdiction that deal specifically with Suite-A technologies.

    Currently the White House is involved with a State Department and Department of Defence project to update the munitions list and shift lower priority tech items over to the jurisdiction of the Department of Commerce. "This helps us focus more on protecting the high-end technologies essential to our national security," said the official.

    Unlike previous generations, the U.S. no longer holds a monopoly on cyber-defense development. "Other actors are getting really good at developing these technologies," said Pironti. "There are tools I wish certain actors didn't have, but it's not a closed-loop system anymore."

    Thursday, November 5, 2015

    Apple will launch a new 4-inch iPhone early next year, says analyst

    But he doesn't predict a plastic iPhone 6c

    Image result for Iphone

    Apple could release a new 4-inch iPhone next year that "resembles an upgraded iPhone 5S," according to a report by respected KGI Securities analyst Ming-Chi Kuo. The device is targeted to be released in the first half of 2016, says Kuo, and will be powered by the A9 chip seen in the iPhone 6S and 6S Plus. However, unlike these larger models, the 4-inch handset will reportedly not offer the pressure sensitive 3D Touch feature, in order to differentiate the lineup.

    "As there is still demand for a 4-inch iPhone, we believe Apple will upgrade this product line," writes Kuo in an investors' note reported by Mac Rumors. "Because the iPhone 5S is more popular than the iPhone 5C, we think Apple is likely to launch an upgraded iPhone 5S. We predict Apple will mass-produce this new 4-inch iPhone in 1H16 with metal casings. In order to make the current iOS 9 or next-generation iOS 10 run smoothly, Apple may adopt an A9 chip for this new phone."


    Kuo's note about metal casings stresses that the small iPhone would not be a retread of the plastic and colorful iPhone 5c. Although there have been rumors about a 4-inch device since 2015, Kuo has a strong track record that makes him particularly convincing. Over recent years he correctly predicted the launch of the 4.7-inch and 5.5-inch iPhones, as well the two sizes of the Apple Watch, the new 12-inch MacBook, and pretty much the entire spec sheet for the iPhone 6S. However, he's not always right at the right time — he didn't think the 5.5-inch iPhone would arrive until later in 2015.

    When it comes to the iPhone 7, Kuo's predictions are safe and not particularly stirring. According to Mac Rumors, he foresees an upgraded A10 chip for the iPhone 7 and 7 Plus, with the Plus model getting 3GB of RAM instead of 2GB to differentiate it as the top-end device. If Apple does launch a total of three devices next year, the iPhone lineup will look oddly similar to Sony's Xperia trio, although even Sony thinks a 4-inch smartphone is too small for today's market

    Tuesday, November 3, 2015

    Microsoft is Trying Really Hard to Shoot Themselves in the Foot (

    Microsoft has great engineering teams that can put together top-notch technology — Windows 10 is a very good operating system, the Surface line is the best hardware you can get, and Office 365 makes a lot of sense. But they continually shoot themselves in the foot and make their customers angry. Why? We have no idea, but we’re going to complain about it anyway.

    A little over a year ago, Microsoft announced with great fanfare that all Office 365 subscribers would get ‘unlimited’ OneDrive storage. Tonight, months after an executive shakeup, the company says it has no intention of keeping those promises.

    Scrooge McDuck is now in charge of Microsoft’s consumer cloud division.

    Not that long ago, I had asked why we are still paying for Dropbox, when the competition is so much better — OneDrive comes bundled with Office 365, and they were offering unlimited storage along with Office for the same exact price as Dropbox charges. But now Microsoft decided to yank their unlimited plan and force everybody back to a 1TB offering — and they even reduced their free plan from 15 GB down to 5 GB, despite the fact that Google Drive is still offering 15 GB for free.

    At some point Microsoft needs to learn that building a great product and having your customers spread the word is the best way to build your brand, and get people to use your product. We’ve been recommending OneDrive for a while despite some bugs in the client because it was a great value. Are we still going to recommend it? Probably, but we are going to have to use an asterisk every time to mention that Microsoft might pull a fast one like they did this time.

    Windows 10’s Reputation Has Suffered Because of Microsoft’s Failings

    They also did the same thing with Windows 10 — they built a great operating system in a short time frame that has tons of benefits over Windows 7, and especially over the lousy Windows 8. They brought back the Start Menu, and although we’re not real happy with how it turned out, at least they finally relented on their Metro strategy and realized that people with desktops and laptops actually want a desktop operating system. Windows 10 is faster, more secure, and has a ton of great features that make it a top-notch operating system that is continually being upgraded.

    And then they decided to do really dumb things like add a ridiculous amount of data collection — what many critics call “spying” — and not give people an easy option to turn it off. Even business customers can’t turn it all off unless they get the Enterprise version, and the off switch wasn’t enabled at launch. Don’t get us started on all the other reasons why people say it’s terrible.

    Early adopters are the people that immediately upgrade to the latest thing, and they are generally power users. If you don’t give them what they want, you’re going to have a bad time trying to convince the rest of the world to upgrade to your product. It certainly seems to be true in this case — most of the help requests we’ve seen to disable the Windows 10 upgrade are from people who are also saying they don’t want to be spied on. And the Windows 10 adoption rate appears to be slowing down even while Microsoft is pushing Windows 10 down people’s throats whether they want it or not.

    Or Maybe it All Makes Sense

    Perhaps Microsoft knows that the future is not a Windows computer in every home. People use their smartphone for almost everything these days, and with Google and Apple adding “desktop” features like multi-tasking and keyboard shortcuts into their mobile operating systems, it’s only a matter of time before mobile operating systems are capable enough for the majority of home users and new form factors with keyboards take over the home.

    If you think of smartphones as a super-fast computer that you carry in your pocket, Windows is already well behind Android and iOS in total market share. Many people don’t have, or need, a desktop computer in their house, since you can do most things on your phone.

    Maybe it makes more sense for Microsoft to focus on their excellent cloud services offerings, and improving Office 365 and OneDrive for business use cases, since that’s where their growth is coming from. They have embraced the mobile-first lifestyle by creating (great) apps for iPhone and Android before bothering to make them for Windows Phone or even their Surface line. These are all moves that make sense if you don’t think Windows has a lot of future in the home.

    Monday, November 2, 2015

    Can Detroit Beat Google to the Self-Driving Car? (BusinessWeek)

    Inside GM's fight to get to the future first.

    “I like to drive cars,” says Mark Reuss, product development chief at General Motors, “so this is a little funny.”

    Not funny-ha-ha, Reuss clarifies, but funny-odd. He’s sitting in the driver’s seat, with his hands on his thighs and his feet on the floor of a big Cadillac that’s driving itself around a banked oval.

    Reuss is at GM’s 4,000-acre proving ground in rural Michigan, hidden from the public behind locked gates, tall trees, and security befitting a prison. The company’s been debugging its cars here since 1924. It’s a brilliant, sunny autumn afternoon—a nice day for being driven. Dozens of tests are going on, though it appears that his is the only one where no one’s holding the wheel.

    Reuss is on edge. He forces a nervous laugh as the car takes itself up to 70 miles per hour. If he has any fast-twitch impulses rocketing across the synapses of his brain—Take the wheel, damn it!—he doesn’t give in.

    “This is the cat’s meow,” he says.

    Bloomberg Businessweek, Nov. 2, 2015

    Cadillac, which was two decades old when flappers were saying things like “the cat’s meow,” will be the first GM make to come with Super Cruise, the company’s most ambitious technological foray since automatic transmission. The system isn’t fully autonomous. Pairing adaptive cruise control with lane-centering technology, it will allow drivers, or whatever they’re called in the future, to let the car take over only on the highway. It will also, if all goes according to plan, propel GM into a multibillion-dollar race for the future of human mobility.

    The question is whether GM can get to the future on time. Super Cruise won’t hit the market until 2017. Elon Musk has just begun offering autopilot on his Tesla Model S. Mercedes-Benz, BMW, Audi, and Volvo have similar hands-free driving systems in the works. Then there’s Google, which wants to skip the half-measures and do a full-on moonshot: totally autonomous cars that, regulators willing, won’t even come with a steering wheel or gas pedal. Google’s latest prototypes are already driving themselves around Silicon Valley, where they’re known as Koala cars because of their bulbous shape, and they may be available for purchase right around the time GM’s hands-free Caddy hits showrooms.

    Google, especially, has Reuss’s attention. Last year he declared it “a very serious competitive threat.” At other times, he’s been snappish: “We’re in the car business today, and they’re not,” he said over the summer. But on the GM test oval, as he rides in the Super Cruising Caddy, he’s talking peace, perhaps even alliance. “I’m not sure it’s an us-vs.-them thing,” he says. Whether or not that partnership comes to pass (they already work together on some smaller stuff), Reuss, 52 and a GM lifer, says it’s imperative that he …

    Suddenly a crescent-shaped light on the steering wheel goes from green to red and the Caddy starts drifting in its lane. Reuss grabs the wheel. A test car just whooshed by on the left, and another slowed down on the right—too much traffic for Super Cruise, making it shut down.

    “That’s stuff we need to just work on,” Cindy Bay, the project’s head engineer, says from the back seat.

    “Yep,” Reuss says, hitting a couple of buttons to restart Super Cruise. “We need to develop it.”

    “It’s like saying, ‘If I work really hard at jumping, one day I’ll just be able to fly.’ ”

    That’s Chris Urmson, the technical director of Google’s car program, during a TED Talk in May. “The prevailing philosophy is that we’re going to take the driver-assistance systems that are in the vehicle today, and we’re going to incrementally make those better and better. And eventually we’ll get to this point where we have self-driving cars.” Urmson’s speech, viewed 1.4 million times at, is classic Silicon Valley disdain for Detroit.

    That kind of talk annoys Reuss, who maintains that GM can disrupt with the best of them. He uses the term 14 times the afternoon of the test drive. How to pay for that disruption is the challenge. Google, deriving profits from its ubiquitous search engine, one of the most profitable businesses ever devised, has the luxury of taking a clean-sheet approach. It has a profit margin of about 22 percent and a $495 billion market capitalization—more than triple the size of GM, Ford, and Fiat Chrysler combined.

    GM, whose profit margin is less than half of Google’s, can’t pour endless amounts of money into developing a driverless car. (Neither company will disclose what it’s actually spent on the technology.) But it has to finance its disruption somehow. In a sense, Reuss explains, the company has no choice but to be incremental, slowly seducing commuters and selling ever more cars—at fatter profits—as the technology improves.

    The CT6, Cadillac’s flagship sedan, will be the first model with Super Cruise. The technology isn’t easy to spot. Hidden behind the car’s rearview mirror is a camera that identifies lane lines and objects ahead. Two short-range radars are embedded in the front bumper, and one long-range radar peeks out from behind the grille. The camera’s primary function is to keep the car centered in its lane; the radars work mostly to detect approaching objects and keep the car a set distance from traffic. All that data feeds into two computers locked in aluminum boxes tucked beneath the spare tire in the trunk. The computers analyze the sensor inputs in real time and tell the car when to accelerate, brake, and turn.

    Super Cruise doesn’t have one of those spinning coffee-can things on the roof, like the ones you see on Google prototypes. Those are lidar sensors—light radar, a highly precise technology that uses lasers to read objects to the millimeter. Lidar is still expensive—about $50,000 for one unit—though Velodyne, a major supplier, has said it’s taking that price down to $8,000. GM hopes to include lidar in the next-generation Super Cruise. Google is developing its own version in-house. Its adorable Koala cars have lidar rigs affixed to the hood, looking like a button nose.

    But the technological differences are really just the beginning of the disruption Google has planned. In Google’s world, you won’t just quit driving cars, you’ll also quit owning them. Forget about investing in an expensive and depreciating asset that sits idle 97 percent of every day. Fleets of autonomous vehicles will circulate through your town, pick you up when you summon one via smartphone—or smartwatch or brain implant or whatever—drop you off, and move on to the next fare.

    In other words, Google doesn’t want to sell you a consumer product, but a mobility service, says Sebastian Thrun, a Stanford professor of artificial intelligence who ran Google’s car project for four years until 2013. “Obviously, once you get into the pure services world, that’s the end of Detroit,” he says.

    Reuss lets out a staccato laugh at the prospect. “I don’t know about that,” he says. “That’s a pretty dramatic comment.” And yet he accepts the premise that car sales will dramatically diminish as personal transportation becomes more service-based. In his vision of the future, GM will play in both worlds, producing autonomous cars to be used as robo-taxis and human-controlled models for the diminishing segment of society that will still wants to drive. It’s a risky strategy of reinvention, and that’s why Reuss acknowledges GM will need partners to pull it off.

    One thing is certain: If GM stays with its current car-selling model, it’ll go out of business. “Yep, we’re done,” he says of sticking to business as usual. “I like being in those kinds of situations. It’s kind of like Apollo 13.” He means the part about the resourceful astronauts fixing their broken capsule while hurtling through outer space, not the part about how they never made it to the moon.

    Driverless Cars

    GM has been talking about self-driving cars since its Futurama display at the 1939 New York World’s Fair. By the 1940s, its promotional films showed families playing cards around a table while their car drove itself. In the 1950s, GM developed a turbine-powered concept car known as the Pontiac Firebird, years before the muscle car of the same name, that could be switched to autopilot after getting the OK from a control tower.

    In 2007, GM teamed up with Carnegie Mellon University to win the Darpa Urban Challenge, run by the U.S. Defense Department's research arm. GM’s heavily modified Chevy Tahoe successfully navigated a city course on its own to win a $2 million prize. The feat “made this very singular statement that automated driving is no longer science fiction,” says Raj Rajkumar, an engineering professor who co-directs GM’s Autonomous Driving Research Lab at Carnegie Mellon.

    Then came the Great Recession. By 2009, as GM was descending into bankruptcy, a small band of its engineers and researchers agitated for producing driverless cars. A much larger group of more cautious executives found the idea reckless, says John Capp, GM’s director of safety, who oversaw development of Super Cruise. “We were grasping for life jackets,” he recalls of GM’s struggle to survive. Pre-bankruptcy, the traditionalists would have won. But with the government bailout came new management, which was finally convinced to invest in self-driving technology. What persuaded them were the billions that GM’s foreign competitors, including Mercedes-Benz and Toyota, were committing to similar research.

    And of course there was that other competitor. “There was a sense in Detroit that people at Google were going to do something foolish,” says Chris Gerdes, director of Stanford’s Center for Automotive Research, who works with automakers on driverless-car research. “But there are a lot of smart folks at Google.”

    If Reuss used to be dismissive about Google, he isn’t at the test track. “I love the company,” he gushes. “I love the people in it.” (This coming from a man not known for expressing much affection in the workplace: Reuss once sent an e-mail to an underling to express his displeasure after the employee used the milquetoast word “competitive” to describe GM’s models. Reuss’s subject line: “Vomit.”) GM already incorporates the Android Auto touchscreen infotainment system from Google into its dashboards. “I love working with them,” he says. “I think they feel the same way.”

    He wants to take this affection to the next level. “We make cars, we know how to make cars,” he says. “They’ve got great technical capabilities. We are very interested in how those two might work together.”

    Google declined to discuss whether it’s interested in teaming with GM on autonomous cars. However, co-founder Sergey Brin said in October, “We are really focused on working with partners” and added that they could include major automakers. Clearly, the courtship is in its early stages.

    “One guy reached around and pulled a newspaper out of the back seat and just started reading it. He just assumed the car was going to go along forever, perfectly safe”

    Super Cruise is acting up again. After a demonstration of how it can automatically slow the Caddy from 70 mph to 40 mph and remain centered in a lane, the car drifts slightly and the steering wheel light turns red. System shutdown.

    The problem this time is glare from the sun, which blinded the rearview mirror camera. It’s a problem Reuss and his team have seen before.

    “This will keep us very busy over the next week,” Bay pipes up from the back.

    “We need to work on that,” Reuss says.

    Safety comes first, of course, but if the autopilot requires the driver to take the wheel too often, then customers won’t see any benefit and won’t pay up for it. And GM is banking on Super Cruise to further boost profits, which have risen rapidly since the company emerged from bankruptcy six years ago. Reuss says GM is intent on expanding its profit margin above 10 percent, more than double what was considered healthy in the pre-bankruptcy days.

    Finding the right balance between human and machine control takes a lot of work. “It’s about, how much feedback is enough without being annoying?” Reuss says. To speed things up, GM simplified the system. It will operate only on highways, so it doesn’t have to deal with crossing traffic, stoplights, or children playing along the road. The company also ditched a plan for an automatic lane-changing feature, where the driver could switch lanes at the push of a button or the car itself could even sense it needs to move over.

    Early in GM’s work on Super Cruise, its consumer research showed that regular drivers became comfortable with autonomous technology surprisingly quickly. While taking a spin in a Chevy Malibu equipped with an early version of the technology, one test subject after another zoned out and found other things to do, such as texting or eating. “One guy reached around and pulled a newspaper out of the back seat and just started reading it,” says GM’s Capp. “He just assumed the car was going to go along forever, perfectly safe.”

    So GM developed countermeasures to make sure drivers keep their eyes on the road and stay ready to take the wheel. For example, Super Cruise-equipped cars will have a camera nestled among the gauges behind the steering wheel that continuously scans the driver’s eyes and face. If the driver isn’t watching the highway, the seat begins vibrating. If that doesn’t get the driver’s attention, alarms sound and the steering wheel light turns from green to blue to red. If that still doesn’t do the trick, the system will slow the car down and, if necessary, bring it to a stop.

    Driverless Cars

    There’s nothing alarming about how long it’s taking Super Cruise to come together. The technology is hard, even by Silicon Valley standards. “We’re being especially cautious at this early stage,” Musk said in October as he introduced Tesla’s autopilot. His system can handle lane changing but requires drivers to hold the wheel at all times. None of the Koalas Google has driving on public roads are for sale. There are still many thorny issues—some technical, some ethical. For example, if a collision is unavoidable, should a driverless car be programmed to always aim for the smallest object to protect its occupant? What if that small object is a baby carriage? GM is wrestling with the same issues as it tests its self-driving Cadillac SUVs on public roads in Michigan and near Carnegie Mellon in Pittsburgh.

    Reuss allows that Super Cruise is a ways off from truly autonomous driving, but it’s a big step in that direction. He unzips a valise and pulls out some internal documents, which he flashes but refuses to hand over. He says they contain GM’s road map to autonomy, starting with “Driver in charge” in 2010, progressing to “Driver mostly in charge” this year, to “Car mostly in charge” in 2020, and finally “Car in charge” in 2025.

    The road map, Reuss says, will lead GM into the bright, post-car-ownership future, where transportation is a service and driving is for hobbyists. GM could provide propulsion systems that power Google Koalas, fleets of Uber taxis, or even Apple cars, should that company decide to make them. It will also produce and sell its own autonomous cars, though Reuss isn’t sure whether they’ll still be branded Chevys and Caddys. There’s plenty of time to figure all that out, he says, dismissing the prediction that driverless cars will be the death of Detroit. “If it were going to switch overnight, maybe that would happen,” he says, slipping his secret documents back into his valise. “But it’s not gonna switch over overnight.”

    A big truck suddenly passes the Caddy on the left, while another vehicle stops on the shoulder. This time, Super Cruise handles the situation and doesn’t shut down.

    “Did you see that?” Bay asks from the back.

    “It handled it all,” Reuss says proudly.

    As soon as those words are out of his mouth, the Caddy starts drifting again.

    “This is not lane centering,” he says.

    “It disengaged,” Bay says.

    Reuss, squinting into the sun, punches the buttons on the steering wheel.

    “We’ve got some time,” he says, and carefully removes his hands from the wheel as Super Cruise resumes control. “We’re in not too bad a place.”