Sign up for our daily briefing

Make your busy days simpler with the Axios AM and PM newsletters. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on the day's biggest business stories

Subscribe to the Axios Closer newsletter for insights into the day’s business news and trends and why they matter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios Pro Rata

Dive into the world of dealmakers across VC, PE and M&A with Axios Pro Rata. Delivered daily to your inbox by Dan Primack and Kia Kokalitcheva.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sports news worthy of your time

Binge on the stats and stories that drive the sports world with the Axios Sports newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tech news worthy of your time

Get our smart take on technology from the Valley and D.C. with Axios Login. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Get the inside stories

Get an insider's guide to the new White House with Axios Sneak Peek. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Denver news?

Get a daily digest of the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Des Moines news?

Get a daily digest of the most important stories affecting your hometown with the Axios Des Moines newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Twin Cities news?

Get a daily digest of the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Tampa Bay news?

Get a daily digest of the most important stories affecting your hometown with the Axios Tampa Bay newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Charlotte news?

Get a daily digest of the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Nashville news?

Get a daily digest of the most important stories affecting your hometown with the Axios Nashville newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Columbus news?

Get a daily digest of the most important stories affecting your hometown with the Axios Columbus newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Dallas news?

Get a daily digest of the most important stories affecting your hometown with the Axios Dallas newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Austin news?

Get a daily digest of the most important stories affecting your hometown with the Axios Austin newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Atlanta news?

Get a daily digest of the most important stories affecting your hometown with the Axios Atlanta newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Philadelphia news?

Get a daily digest of the most important stories affecting your hometown with the Axios Philadelphia newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top Chicago news?

Get a daily digest of the most important stories affecting your hometown with the Axios Chicago newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Sign up for Axios NW Arkansas

Stay up-to-date on the most important and interesting stories affecting NW Arkansas, authored by local reporters

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Want a daily digest of the top DC news?

Get a daily digest of the most important stories affecting your hometown with the Axios DC newsletter.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

1962 Belvedere sedans at the Plymouth factory in Detroit, Michigan. Photo: Michael Ochs Archives/Getty Images

News of Waymo’s robotaxi launch, Uber’s return to public road testing, and Zoox’s plans for full commercial deployment in 2020 have kept the AV companies aiming to produce all key components themselves in the spotlight. But major contributions are being made by a sometimes overlooked but equally critical group of horizontal suppliers, who are carving out highly specialized technical niches as suppliers.

The big picture: As AV technology advances, vertical companies — whether legacy automakers, tech companies or startups — are likely to become increasingly dependent on horizontal players for mapping, simulation, tele-operations and more. For all its new technology, the AV industry may end up with a tiered system just like that of its conventional car predecessor.

Details: Horizontal companies tend to be faster, since vertical companies often can’t afford to spend several years spinning up a team to focus on a problem that has already been solved by someone else.

  • They’re usually cheaper too, as a result of spreading costs — especially for expensive R&D — across many different customers.

Yes, but: Vertical AV companies do have the advantage of working with a fully integrated set of technological systems, whereas horizontal companies have to adapt to the various standards vertical companies use. For AVs, this includes different formats for everything from mapping data to annotation.

Two closely related examples help make the case for the horizontal approach:

  1. Personal computing: The companies that prevailed were not the ones that manufactured everything in house, but rather those that aggressively specialized and bought everything else off the shelf. This is one of the reasons Apple Computer in the 1980s remained a niche, expensive products company while the mass market was won by PC makers.
  2. Conventional cars: In the century-old auto industry, specialization has always been the name of the game. The automakers that have survived haven’t done so by making their own airbags and screws; instead, they look to companies like Continental and Bosch (so-called Tier 1 suppliers, who in turn often procure component parts from more specialized Tier 2 and Tier 3 firms).

What to watch: Vertical AV companies may insist for a while longer that their components are too integrated to rely on outside software. While this is arguably true now, AV software will only become more modular, and it's likely that horizontal suppliers will be increasingly able to deliver faster, more sophisticated solutions at lower costs, giving way to a new tiered system.

Qasar Younis is the CEO and co-founder of Applied Intuition, an AV simulation software company.

Go deeper

Stephen Breyer formally announces retirement from Supreme Court

Photo: Bill O'Leary/The Washington Post via Getty Images

Justice Stephen Breyer on Thursday sent a letter to President Biden formally announcing his retirement from the Supreme Court.

What he's saying: "I enormously appreciate the privilege of serving as part of the federal judicial system ... I have found the work challenging and meaningful," Breyer said.

COVID created an epic U.S. trade gap

Chart: Axios Visuals. Data: Census Bureau/Bureau of Economic Analysis

The details of the blockbuster fourth quarter GDP report released Thursday morning tell a vivid story of how the underpinnings of the world economy have been reshaped by the pandemic.

One example: In the arithmetic around U.S. economic output, trade acted as a more severe drag last year than it has in a generation.

Updated 1 hour ago - Technology

Pandemic gave cover to online dating scams

Illustration: Annelise Capossela/Axios

Crooked Casanovas used online dating scams to steal an estimated $500 million from lonely victims last year, according to a new analysis of government fraud data by Atlas VPN, an internet security provider.

Why it matters: The isolation of the lingering pandemic provided cover to fraudulent suitors who had an excuse for not meeting up in person even as they fleeced their would-be lovers out of gift cards, money — even cryptocurrency.