Car companies for years have been enhancing driver-assistance systems, which automatically control speed and steering

International News via Reuters:

Automakers are racing toward a key milestone on the long road to fully driverless cars: systems that let drivers take their eyes off the road – to shoot a text or peck away on a laptop – unless the car alerts them to retake control.

Car companies for years have been enhancing driver-assistance systems, which automatically control speed and steering. Letting drivers tend to other things while behind the wheel could be a next step that helps automakers monetize their sizable investments in autonomy.

 “We can start saving them time immediately, and do it in a very affordable way,” said Doug Field, Ford Motor’s chief electric vehicle, digital and design officer. Ford is planning to introduce an eyes-off system on affordable electric models starting in 2028. 

But there is a growing industry debate about whether the eyes-off technology – referred to in the industry as Level 3 autonomous driving – is worth offering at all. Some executives and industry experts argue that handing control back and forth between the car and human driver is unworkable or unsafe, and raises thorny liability issues. 

Some also question whether enough consumers will purchase the technology to justify its hefty development costs.

“We don’t know if Level 3 ever makes financial sense,” Paul Thomas, president of the North America business at automotive supplier Bosch, told Reuters at the CES consumer-technology show in January. 

BACKTRACKING ON LEVEL 3 DEVELOPMENT

A decade ago, auto executives predicted that autonomous cars would be ubiquitous by now, but technological challenges, cost overruns and regulatory uncertainty have delayed broad deployment. In the meantime, automakers have been packaging the building blocks of fully driverless cars into increasingly capable driver-assistance features that require constant human monitoring.

Eyes-off Level 3 systems sit at the midway point on the industry’s automated-driving scale, from basic features like cruise control at Level 1, to driverless capability under all conditions at Level 5.

Currently, almost all assisted-driving systems on the market, including Tesla’s Full Self-Driving, are classified as Level 2 systems, which require drivers to watch the road. Beyond Ford, automakers that have announced plans for eyes-off Level 3 tech include General Motors and Honda Motor. 

The cost to develop a Level 3 system for operation on highways is up to $1.5 billion, roughly double the amount for Level 2 systems that can work even on city streets, according to a recent survey of industry players by consultancy McKinsey.

“Those carmakers who have attempted an L3 system, and the consumers who have tried it, are finding that the juice isn’t worth the squeeze,” said John Krafcik, the former CEO of Waymo and current board member of EV maker Rivian. 

Already, some companies have backtracked on their Level 3 ambitions due to cost concerns, McKinsey said, and instead have redoubled efforts on enhancing the capabilities of their cheaper Level 2 systems. 

Germany’s Mercedes-Benz, the only automaker so far to introduce Level 3 tech in the U.S., recently halted its program because limited speed, restricted conditions and geographic boundaries curtailed demand. For now, the company is focusing on rolling out autonomous driving features for city streets that require driver supervision. Mercedes plans to introduce an upgraded Level 3 system in a few years, a spokesperson said.

In August, Reuters reported that Stellantis shelved its Level 3 development efforts because of high costs, technological challenges and concerns about consumer demand.

Though Tesla’s Full Self-Driving feature can operate on city streets, it requires the driver to pay attention to the road. The Elon Musk-led company has not yet introduced an eyes-off Level 3 offering for personal vehicles, and instead is focused on delivering fully autonomous driving. 

Tesla has launched a small robotaxi service and plans to expand to a handful of U.S. cities by the first half of 2026, putting it in direct competition with industry leader Waymo, which is owned by Alphabet.

A major technological challenge with Level 3 is to design a system that is capable enough to detect the need for human intervention, provide that warning, and keep driving until the driver takes over, said Bryant Walker Smith, a University of South Carolina law professor focused on autonomous-driving regulation.

“That’s going football fields down a road, minimum 6 seconds, probably much more,” he said. “What makes more sense from a regulatory perspective is being able to provide Level 4 under a significant enough set of operating conditions that people will actually find it useful to use.”

Joel Johnson, a strategist who has worked with GM on autonomous programs, said eyes-off systems present cost and liability challenges for car companies.

“Automakers only have a reason to deploy autonomy strategically to fight Waymo and keep them at bay, or to be able to charge more money” through upfront payments or subscriptions, he said. 

LIABILITY CHANGES WITH EYES-OFF TECHNOLOGY

Analysts say that moving to eyes-off technology increases the chances that the vehicle manufacturer would be held liable in the event of a crash.

The question of who might be held responsible in an accident involving Level 3 tech – the driver or the carmaker – is murky today, according to an article published last year in the Fordham Intellectual Property, Media and Entertainment Law Journal.

“If a publicly acceptable regulatory solution is not quickly implemented, this technology may never reach the market,” the article said. 

Adding pressure on carmakers to introduce more sophisticated assisted-driving features is the rapid progress of Chinese automakers. China’s government in December cleared a car with Level 3 capability for the first time. 

Already, Chinese brands including Leapmotor and BYD are including advanced Level 2 driver-assistance features in their cars’ sticker prices. That could prompt a global price battle if U.S. and European customers expect the same features from their models without the monthly subscription.

“This is a war of global business models,” said Johnson, the strategist who has worked with GM.  

Reporting by Nora Eckert in Detroit and Abhirup Roy in San Francisco; Editing by Mike Colias and Matthew Lewis

The investments would mark a sharp increase from $410 billion in 2025

International News via Reuters:

U.S. technology giants Alphabet, Amazon, Meta and Microsoft are expected to collectively invest about $650 billion to scale up AI-related infrastructure this year, according to an analysis by Bridgewater Associates.

The investments would mark a sharp increase from $410 billion in 2025.

In a letter to clients, Bridgewater co-chief investment officer Greg Jensen said the artificial intelligence boom has entered a “more dangerous phase,” marked by exponentially rising investments in physical infrastructure and growing reliance on outside capital.

“Compute demand continues to significantly outpace supply, driving hyperscalers to invest even more rapidly to try to someday get ahead of the demand.”

The four companies have already curbed share buybacks more aggressively to help fund the surge in capital expenditure, Jensen said.

The scale of spending, he said, is creating significant downside risks if anything went wrong.

Anthropic and OpenAI will need major product breakthroughs to secure backing for massive final fundraisings ahead of potential IPOs, he said. Without a credible path to outsized profits, they could struggle to justify lofty valuations and heavy capital demands.

Besides, these products are exposing significant risks to other sectors such as software companies and data providers, he said, pointing to the recent selloff in software stocks.

“It is no longer possible for AI leaders to satisfy their investors’ expectations without creating existential risks to other sectors like software,” Jensen added.

Beyond stock markets, Jensen said tech investment spending remains a significant “upward pressure for U.S. growth.”

Bridgewater estimates tech investment added about 50 basis points to U.S. GDP growth in 2025 and could provide around 100 basis points of support this year.

However, the spending boom may also lift inflation in technology and communications equipment and push up electricity prices in some regions.

A severe stock market correction could undermine growth and limit companies’ ability to raise capital, similar to the Dot-com bubble in 2000, Jensen said, but added that recent moves are far smaller.

Reporting by Prakhar Srivastava in Bengaluru and Anirban Sen in New York; Editing by Leroy Leo

The European Commission, which acts as the bloc’s competition enforcer, is now revamping merger rules dating from 2004 and aims to publish proposals for feedback in April

International News via Reuters:

Finland, Ireland, the Czech Republic and two Baltic countries have warned against loosening EU merger rules in response to calls by some companies for easier regulatory scrutiny of their deals in order to better compete with non-EU rivals.

The European Commission, which acts as the bloc’s competition enforcer, is now revamping merger rules dating from 2004 and aims to publish proposals for feedback in April. The aim is to encourage pan-European mergers, sources have told Reuters.

The five countries, including Estonia and Latvia, wrote in a note seen by Reuters that Europe does not need to relax EU merger rules to create European champions because the existing rules already allow for these where the economic evidence supports it.

“Size in itself should not be the primary objective” of mergers, they said in the document that is to be discussed at a meeting of EU ministers on Feb. 26, calling to pursue “undertakings that succeed through efficiency, innovation and fair competition instead of exemptions or special treatment”.

They refuted arguments, especially from European telecoms operators, that bigger companies would spur more investments, instead supporting regulators who note little evidence of such an effect.

“The empirical link between higher concentration and stronger investment incentives in telecom markets is at best inconclusive and should be analysed on case-by-case basis,” the countries said. 

They said claims that larger operators would have secure supply chains could backfire by making Europe too dependent on a small number of suppliers and thus less resilient.

“If strengthening resilience and secure supply chains is considered to require additional regulatory measures, these should be pursued through sectoral or industrial policy instruments rather than through changes to competition legislation,” they added.  

Reporting by Foo Yun Chee, editing by Andrei Khalip