Horizon Robotics CEO: Car Chips, Mind-Off Driving and China's Speed

In some sense, this is terrible business, you know, heavy investment, very slow return. But in my view, sometimes terrible business means great business, because that's an entry barrier for all the other newcomers, it's extremely high. Hi everybody, I'm Nikola Tangan, the CEO of the Norwegian Sub-Unwell Fund. Ten years ago, we all assumed self-driving cars would come out of Silicon Valley. But today, the most advanced cars on the road are Chinese, and Western car makers are going to China to buy the technology. Nobody sits closer to the shift than my guest, Yu Kai, who's the founder and CEO of Horizon Robotics, which supplies the chips and software that let Chinese cars drive themselves. So one of China's leading AI scientists, before he became an entrepreneur, and few people can explain better how China got there, and where it goes next. So Kai, welcome. Hi, Nikola. Let's just start with a simple question, what does Horizon Robotics do? Well, essentially, what we are doing is the computing platform for all generic robots, including self-driving cars. But of course, our current business is probably 95% or 100% focusing on cars, passenger vehicles. So if I sit in a car that you supply into, what is your chip do? Well, essentially, it's running the software all the way from camera perception to trajectory planning and control. So essentially, it's kind of like brain for all the cars. Now, your chips run roughly one out of four cars in China. Just to tell me about one out of three, I think. That's our latest trick record. Thank you. Well done. Who are your customers? Well, you know, the major Chinese OEMs like BYD, Chile, you know, Cherry, Chang'an, Great War. And also the global, some of the global OEMs like Volkswagen, Toyota, Suzuki, so quite some local domestic and global players. Who do you compete with? Oh, very good question. I think like mobile eye, you know, and also Huawei and quite a few domestic players like Black Sesame. I'm not sure if you ever heard of that. And Qualcomm and Media, Texas Instrument, you know, Roneses, NXP. So actually, a lot of global and China technology companies. Why are you the best? Oh, well, it's a very good question. I think it's really because we are very focused, you know, we focus on this single one thing to enable autonomous driving and all the way to robotics. We are not doing anything, nothing else. So I think the intensity of focus is one thing. The other thing, I would say, it's a fundamentally our vision and the mission. Because if you look at the name of our company, you know, 11 years ago, when we founded this company, we named our company Horizon Robotics. Right. Back to 11 years ago, in China, there was even no such a business at all. And even eBay business was just a starting. Right. And we had this vision, which was not a existing opportunity. So we envision in the future, the world will be full of all kinds of different robots, you know, working in a farming field, manufacture, assembly line, and logistic warehouse, you know, every house, home, service, and elderly care, and also, of course, self-driving cars. So we envision there should be a unifying platform, just like, you know, windows and Intel did for personal computing. And just like, you know, arm and enjoy, what they are doing for mobile computing. So we envision in the future, there going to be such a kind of like computing platform, which is generic for all kind of, you know, robotics, working in different across different vertical domains. When did you, when exactly did the vision hit you? Well, that's very good question. I think exactly you are right. I think the vision actually hit me. But I find this opportunity always vision. Well, I don't know, you know, I have been working in machine learning for over 30 years, you know, since my early days as a junior student in college. And by chance, I read a book about machine learning. And I was so amazed that it's so fantastic to develop computer algorithm. One day, it can be like a human brain getting smarter and smarter over experience. Yeah, by learning more and more from data. So I decided to devote my whole career into this single subject machine learning. Yeah, and that was for my thesis for my undergraduate and my thesis for my master and also for my PhD and also for my first job back to my days in Siemens and those later to Silicon Valley join an easy lapse in Silicon Valley. And later join by do and then later found the horizon robotics. So I changed my locations and I changed kind of different roles from, you know, individual researcher to team leader to head of research labs and later become a founder of technology company. I changed my roles, but there's one thing, you know, remains never changed, which is my mission and my vision to develop a machine learning algorithms to make machines getting smarter and smarter. Two companies that we've had on a podcast, XPang and Xiaomi, they also make phones, cars in addition to chips. So how do you, why did you decide never to build a car? We always position ourselves going to be like Microsoft and Intel for not for PC but for robots. And I think a platform, enabling platform. I think it's a much more interesting positioning, not just about like a business model, but also about in terms of the impact you can make to the whole world. For example, you know, back to the days of a personal computing area, you know, windows and Intel, they're not just, you know, help or enable like a NOVA or Dell, they actually help the entire mankind, you know, get into the new kind of sort of technology civilization or new area of technology, which is personal computer. To enable all the white color people to increase dramatically, their productivity. Right. It's what's an amazing impact. So Xiaomi, they actually maybe help one brand, you know, to become very, very appealing, very, very attractive to consumers, but I want to enable and help all the brands, all the cars. It's difficult to build a car. Yeah. Of course. So, but you know, you have the technology, you have the chips. So if I ask you to build a car, how long time will it take you? Well, I wanted to achieve like a horizon inside, you know, that's I think that's much, much bigger dream, much more interesting for me. I don't want to be a car maker, you know, and I want to help more car brands to become more attractive. The Chinese car market is kind of brutally competitive. Yeah. What is what is driving the Chinese car market just now? Is it price intelligence? Just what is it? Well, the current Chinese car market is really crazy. I think you don't see any market like here. There, you know, I don't know how many, probably 60 or 70 different carburens and for the first half of this year. in 580 new car models launched, and it's extremely, you know, tough market. But I think the market is really driven by competition. But on the other hand, it's also driven by consumer demand. So consumers are really expecting, you know, more and more smart features, you know, automatic parking, you know, autonomous driving, and the more fancy entertainment assistance. And I think all of those factors driving the market, not just the competitive, but also very innovative. What is it due to Chinese manufacturers when you have such strong competition at home that when you get out to, let's say Europe, is it just like easy PC to compete relative? I think we position ourselves first, we are not competing with any car makers. We are actually enabling them, we are helping them, we are building strong partnerships with all the car makers and the older ecosystem partners, including the automotive suppliers, for example Bosch, Denzel, and many other global and local suppliers. And our philosophy is really make friends and make long-term trust with our customers and partners. Essentially, this is fundamentally in the gene of our company. So we don't have too much culture from the competition perspective, but more from what kind of value we can create. But luckily, if you look at our business, I mean, fundamentally compared to those car makers, we are not so crowded, right? And if you look at China, I think pretty much the three top players for the automotive computing, I think, namely nowadays, I think really consolidated to Nvidia, Huawei, and the horizon robotics. Not very crowded. Yeah. Partially, because we choose the position, this business is having extremely high entry barrier. You know, it's not like, okay, a bunch of guys having VC funding and then easily getting into the business because this is automotive. Automotive means mission critical. And it has to have in the highest standard for the quality, for the safety, you know, and let's say we are doing this chip design for automotive, right? It's not like a consumer type of silicon. And it has to go through all the very regulars and tough qualification and testing process. So normally, if we initiate a new project, a new generation of product, so it will take three to four years to get the product, the chip, and the solution ready for car makers. And then, if lucky enough, we want a new nomination from one car maker. And then we need to also go through the cycle of the production for the car platforms. And that's going to be another three to five years, in China two years, right? For global OEMs, they are slower than typically five years. So then, think about, it's going to be at least the front five years to eight years for the cycle. So in some sense, this is terrible business, you know, heavy investment, very slow return. But in my view, sometimes terrible business means great business because that's an entry barrier for all the other newcomers is extremely high. And then I think a good business is something, well, you can strip well overnight. And that's my opinion. Talking about sleeping well, and the autonomous journey. So you split between hands off, ice off, mind off, these are kind of the three steps that a car will go through. And in January last year, you could date some of them. So we'll have ice of in three years. I'm sorry, hands off in three years, we'll have ice of in five, mind off in ten. Just where are we today? Well, we are in a very good progress, I think. You know what? In the industry, they're sort of like standard from like level two, level three, level four, level five, it's really from the engineering standpoint for the consumers, you know, they have no group, what is level three. So I always try to connect our technology and the product to something where my mom at least she can understand. So then that's my way to interpret the technology stages from, you know, hands free, hands off, ice off, and minds off. So would you tell your mom just now? Right now, we are in a very good progress to achieve 40 hands off, yeah. I think then I said that I made that statement the last year, right? So that means by end of 2028, we can achieve 40 hands off. And then by the end of 2030, to achieve 40 ice off. And then by the end of 2035 going to be 100% the minds of basically you can sleep in your car, you know, running car. And I think we are in a very good progress. And if you look at our product, our latest product, then namely the software stack, product horizon, super drive, running on our journey 6T SOC. Currently, essentially, you can feel completely hands free. Yeah. It's just like a new version, a smarter version of automatic transmission. You know, if you remember, you know, over the last 20 years, so the whole industry, the car industry evolved from like the manual transmission and you need to control all the gears and later getting into the automatic transmission, right? But now I call this getting into the smarter version of automatic transmission. Basically, you just need to, you know, like stay watching ahead and nothing else you need to take care. What is the lacking? What part of the technology are you seeing? What's the critical element which is still left here? Well, I think we need a much bigger knowledge to test. And we need to have better numbers for statistics. And then to prove that the technology is safe enough to clean, you know, ice off, right? So I think already we are in a very progress to approach the stage of hands off. But I think we need a much bigger, you know, knowledge to test and prove ice off. Do you build your own AI models? Sure. Sure. The self-drying model. Yeah. Yeah. You know, remember, we position ourselves as a Vintel, right? Not just the Intel. We position ourselves as a Vintel. And I think Vintel is the really, I think it's an amazing business model. And where do you, where is the kind of the future breakthrough going to come? Is it the model, the data, the chips? Well, it's a, it's a combination of three factors together. I think this is a typical formula of today AI business. I think you need to have a much bigger compute. Running locally on a vehicle. And also you need to continuously collect in bigger and bigger data. But also meaningful data. It's just, it's not just the quantity, but also quality. That means you need to collect many, many of the meaningful coronacases, right? And I think also you need bigger and the bigger models in terms of a number of parameters. Yeah. How many people are you now in the company? Around 2000. What do they do? I think there will be a very technology savvy company. So most of our employees, they are engineers. They are either software engineers or hardware engineers. And they are working extremely hard. Because you don't produce, you don't produce the chips, you don't, I mean, you also use the production right? Exactly. We are like a typical, for the hardware side, we are typical fabulous company. We design the chip, but we don't manufacture the chip, all the source to our partners. And, and also we develop the software, the end and the new You are on that work as well. for self-driving. What does working hard mean? Very good question. You know, we are kind of like typical technology culture. We don't have the rules or the policy. You need to come to work in eight a.m. Actually, typically most of our engineers, they come to work around 10 a.m. and they freely organize their working time and there's no rules like, okay, before which time you are not supposed to leave office. So there's no such thing. I think the sense of ownership of our engineers, I think it's very high. What do you think on average? How long days do you think on average they work? Actually, I have no clue. Quite some of our engineers, they even know working from home, right? We don't measure that by working hours. I don't know some of the China companies measure by working hours. We never measure that. We just carry about what kind of how far we can achieve. When you say that the model time in China, the cycle time is two years versus five years in Europe, what explains the difference? As far as I know, because I work with so many Chinese audience, they are working extremely hard. They have a very strong sense of competition. That's urged them to try all the ways to improve the process. But they work really hard. For example, they don't have summer locations. Like 30 or 40 working days of during the summer. So I think they are working really hard. What's the key to innovation? How do you create the really innovative culture? I think first of all, we are a company. Not really is driven by the vision. We are not like an opportunity driven. We are not competition driven. We work on that because we really want to push the boundary of the entire society and the industry. I think it is a self-moderation. That means we don't want to be the same as any other company. We don't want to do sort of things that other companies are doing. That's why I also explained that's why our business essentially is not so crowded in China. This is actually very real phenomenon because in China, if any business looked even somewhat interesting, not even profitable, but somewhat interesting. Typically, a hundred companies jump in to compete. It's crazy. Look at today the kind of AI and the embodied AI business. So many companies. And also so many car companies. I think we are working on something which we believe, but not necessary. Other people love to jump in. The fact that you have all these companies jumping in into these sectors. What does it mean in terms of the supply chain and the various choices you have as a manufacturer? How does it all go together? For us, we just choose the best to work on because we don't have any luxury to be. I mean, something we need to be very innovative. For example, the chip architecture, the compiler, the algorithm, some of the things we are just so much respecting the tradition. Because this really means life and death, mission critical. If any car accidents happened, it's not just the impact in the driver or passenger itself. It's sometimes a public safety issue. So we need to be very, very religiously to respect the tradition. So we just choose the best partner to work with. What advantage do you think it is for Chinese auto manufacturers now to have that breadth and depth of supply chain which we don't have in Europe? Well, yeah, you know, I worked very closely with many global automotive companies like Bosch, Denzel, Volkswagen. I talked to them about that. It turned out actually over the last maybe two decades or so. China became a country where the supply chain of components and technologies is so rich. This is exactly one of my friends who is German, he told me. He thinks China nowadays is like a wonderland for supply chain because no matter how kind of new ideas, then you can always find partners and suppliers in China. Either you supply the technological component to you or work with you to actually fulfill your requirement. So and the speed is incredible. So I think that's a give China an overall very fantastic environment to innovate. Yeah, so the kind of overall ecosystem is there. You don't need to write an email to somewhere else. Yeah, it's just to make a phone call, send a weird message or just take a flight from Beijing to Shenzhen just three hours. Essentially, nowadays, including myself and also all of my friends, we travel so frequently within China. We take a entire China as one village. When you see a client of your research as Volkswagen laying off 100,000 people, what are the kind of reflections you are having? Well, we actually position ourselves as a strong partner to Volkswagen and many other global companies because we don't face any competition, let's say in Europe, right? If you look at in Europe, there's semiconductor companies like Infini and NXP and also ST electrical micro electronics. And we are not competing with them because they have their focus on, for example, analog chips and also the MCUs and those those kind of their strengths. But we are working on something like a computing for cars, which is exactly what they are not doing. And then in that sense, we find a very strong synergy and to work together. So in my view, I think both European friends and Chinese need to change the mindset. For example, in the past, let's say several decades, the general pattern was like global companies trying to make money from China and typically for all the motive. Nowadays, it's getting very difficult. And now there could be some other mindset that say, oh, Chinese companies, now we have a very competitive product. We need to get into Europe to take their market shares and make money from them. That's also not healthy, right? I think we all need to embrace a new mindset, which is a win-win mindset. Now the new opportunity is for us to work together, to explore a new market, to launch more competitive products, and to make money, make profit, create value for global. So this is kind of the mindset I share. Deeply with many of my friends in Germany, in France, and in other countries. Your company is called Horizon Robotics. How far is a car from a robot now? It's still a little long way to go, but not that long, not that far. I think probably, as I said, in two years, by the end of 2028, all the passenger vehicles in China will be hands-free. So it's already kind of semi-robots. And what is your business going to be in the robotics business? Actually, we are already a leading player in China right now, one of the, I think, top two players for the robotics, generic robotics computing. Yeah, we are enabling a lot of robotics companies. Yeah, we are supplying, like, computing solutions to enable them. What's the overlap in technology and systems between self-driving cars and, you know, humanoid robot experiences? Yeah, that's a very good question. And I believe eventually, the two business technology will really converge and eventually become a unified computing platform, right? So cars will become robots and no big difference, I think. The cars will, you know, sense the environment and understand the intention of the pedestrians surrounding, you know, the surrounding traffic participants. And also, we'll understand the gesture of the policemen and, you know, and making decisions in various sophisticated traffic environments. I think that's basically fundamentally no big difference from any other, you know, computing pattern of robots. So eventually, we are really converged. Tell me about the speed of development of humanoid robots in China now. Well, you know what, it's crazy. Again, there are like hundreds of such companies. That's so, so intense. And but I think all of them are still really long way to go. Yeah. If you look at the autonomous driving, you know, how many years? I think Horizon Robotics probably is the first autonomous driving startup in China, right? But we'll be already working here for 11 years. And now you're talking to, and now you're talking to in robotics and now humanoid robots, I think it will take many years to go. What do you do, what do you do inside the robot? What is your, what is your software do? We supply chip solutions. Yeah. And for robots, we are not so much into the software. Yeah. We are supplying chips to the robot companies. When do you think we'll have meaningful volumes of humanoid robots coming? Five years, if a optimistic, you know, I know I'm a little bit conservative compared to many other guys. And I try to be, you know, objective. And also partially, as a CEO, as a founder, I'm basically a technology guy. So I think then I'm a little bit more conservative and also objective. What will you personally use them for? I think the number one scenario is a home service. Yeah, you know, I think for each of the family, we enjoy all the fun things, but we don't also enjoy many of the tedious work, like cleaning tables after dinner. Yeah, sometimes we like cooking, but we don't like cleaning. I have a theory that divorce rates will go down when you don't have to do boring things anymore, but. Exactly. Exactly. We share the rubbish or walk the dog. Yeah. There's another thing, which is, you know, China is facing very terrible these Asian society issue. I mean, it's coming so quickly, quite unexpectedly, right? It's the problem, the issue is getting worse, actually compared to Europe and even Japan. So I think, you know, what about the elderly care, what about the lacking of labors. So this is going to be a huge social and economical challenge for China. What's the overlap in supply chain between self-driving cars and robotics? I think almost the same. So if you win the EV race, you'll win the robotics race. Yeah, that's fundamentally what I believe, what I believe. Yeah. My argument is, if you are a dinner for automotive supply chain, and you're going to be a dinner for robotics, if you look at the actuators, older, you know, mechanical things, older sensors, like the lasers, you know, radars, radars, I think currently apply to cars. And then because car business is a big volume, and then over competition, older suppliers will continuously improve, you know, the cost of structure, the performance, you know, and then make it a very compact, right, very compact in the form, form fact. So it's going to be make there those guys with very strong position for robotics business. Just like, you know, many of the companies for who were winners for the mobile phone supply chain, and the later they become extremely competitive for the generic IOT business. Yeah. Stupid question, but where does that leave the race between China and the US in robotics? Yeah, you know, what I don't like this kind of the view to look at this again, you know, it's, you know, I don't know. This kind of zero sum again, I'm not sure this is the, the, the, the, the truth. You know, if the China is very strong for manufacture, right? So if the robotics industry in the US, they don't work, if they work with China ecosystem, actually, they could become more innovative. They could innovate in a much faster pace, right? And, you know, and if they only rely on the kind of a supply chain or manufacture, they will end up with slower technology innovation. So I think it really makes sense, you know, always find, you know, the synergy to work together and to create a value for the global together. So what is the city going to look like in 10 to 20 years time? You know, I'm a huge fan of the Asian, the Greek culture and history. And you know, in July, I've been to Athens again, you know, I've been there many times. It was a very golden age, you know, where people really enjoy free thinking, free, you know, exchange of ideas, and there's, you know, so many, you know, inspiring philosophers, you know, and make huge impact for the human civilization, right? And they are free of labor work, right? And so I think civilization is so much related to the freedom of human, you know? And then if we have all the robots to do all the tedious and sometimes dangerous work, and then we can have more time like you and me right now, chatting, exchanging ideas, sometimes, you know, hunting around for other things. And more time for entertainment, more time for research, more time for arts. And I think even, you know, more time for outing, that would be great, you know. If you look at today, the traffic jam in Beijing and Shanghai, right? It's if you ever come to China, it's terrible, right? It's very often like a one-way commute from home to office. You stuck in a traffic for almost like two hours. And then you wasted your two hours, you know, of your life doing nothing. Because you need 100 percent, you know, focus, steering the wheel. And then are you the master of the car? No, in that situation, you are slave of the car, you know, because you don't have choice, you know? The essence of robotics is to keep the freedom and give the choice back to the human. And the human can make a choice, you know, to do something or not doing something. What's the time going to look like physically? What's the city going to look like physically? You mean, you know, at that time, even today, China, I think, the housing, like Beijing and housing price, you know, from the from school district. school district from like a region to region, quite different, right? Maybe in 10 years and a house in price won't be so much different because you know essentially every car is like a moving house and then you have much more freedom and you don't have such kind of anxiety about distance and so I think the city will be very different, drastically different and also traffic you know today I think all the people are kind of like competing fight for you know the the lambs and the traffic the parking lots and if everything you know self-driving and then all the the efficiency of the roads will be much more much because all the cars are coordinated rather than competing against each other and so I think the efficiency of the traffic will be you know 10 times more improved right and then the environment will be much nicer you know and much less noise and much less stress and much less anxiety you know I think the city will be much better take me back one second to your your essence visit so when you're in essence what you do what do you what do you do there museum yeah and you go to all the islands yeah so you go up to Acropolis and you stand there and what do you think what do you think when you're there I was kind of a it's a stunning I think it's I was so so amazed like I think culture means everything human thinking is human thinking is unbounded yeah and essentially we can do something much greater and then then then today what we can imagine and yeah I think it's such amazing thing and also in some sense I think it's a some it's a shame today this world we are still doing so many terrible things not making making the world a huge mess yeah I think it's a shame we are not not doing anything greater than the ancient the great great people personal question what's the biggest personal failure in life personal failure to be honest I'm not I'm not a very pessimistic guy you know I I if I ever encountered any frustration or failure and I always turn into the new page and I almost immediately forgot I think for God in bad things probably is a good ability yeah and I think I'm an insane optimistic guy and also I care the power of now you know I'm also very good you know following the philosophy of Zen so the Chinese Asian Buddhism philosophy so really caring the power of now what's the key what's the key to the Zen philosophy for you the power you know the happiness is so simple you know according to one of the great monks in in the history of Zen he said actually many people are having a miserable life just because when they are supposed to sleep they think about work when they are working they are thinking about sleeping and then the essence of happiness is very simple when you are working you just focus on working when you are sleeping just asleep and then I focus the power of now because I'm running this company horizon robotics right I just focus on this and nothing else nothing more doesn't less and just doing this whole thing what's something about you that most people don't know oh there's a one thing I'm not very satisfied about myself it's about my my weight I'm just having too good you know appetite I mean I love food so much so this is really something not so good what what do you read well recently I'm reading one book what's the name of the book it's it's telling about the story about three companies Microsoft Intel and Apple it's about the old kind of decisions strategies they they've been making to create the era of a personal computing it's called a strategic thinking yeah what's your advice to young people you know doing what you love love what you doing probably are equally important many people are always trying to to dream to do what they love but in reality you are not always so lucky yeah sometimes you need to accept yeah sometimes you need to accommodate right but it's nothing pessimistic you know and because enjoy whatever you have it right now it's also a very good attitude right sometimes you love what what you are supposed to do or what you are requested to do and then maybe this whole thing can become something really you love to do and I think you know we need to have a such a kind of attitude you know love what do we do and do what do we love well you I think that's a wonderful place to end big thank you what a what an incredible story what an incredible company you know love your life philosophy there is so much to take away from here so big thank you thank you Nikolai