The self-driving car idea came from a Darpa challenge in 2005, where the federal government was awarding money to a team who could develop a robotic car that could drive itself through the desert. Thrun, a Stanford University professor at the time, and his team members took first place in the challenge that year.
The idea is much more than a novelty, Thrun said.
"It suddenly became clear that there is a much bigger vision here than just driving cars through the desert," he said. "All of us drive cars all the time. It's the biggest expense in the American household, transportation. Cars kill lots of people, people driving cars cause accidents, and I looked at this and felt it shouldn't be that way."
Google's self-driving cars have now been driving on public streets for over 140,000 miles, with each drive closely monitored by humans, he said. His plan isn't to completely cut the human out of the driving process.
"I hope that the combo of a human driver and the robotic technology will make things significantly safer, not just handing over total control to the car itself," he said.
Google X's latest project is Google Glass, a set of glasses that allows the wearer to see the world through augmented reality.
"The idea is, can we make a device that is there for you when you want it or need it, but not distract you?" he said.
Unlike a cellphone, the device allows humans to stay connected, and remain in the information flow in real-time, while being hands free, Thrun said.
"Google Glass is really my ambition to really do a moonshot-type project, and not just shoot for the moon, but bring the moon back to Earth and launch products," he said.
Besides revolutionizing the way humans will drive and interact with the physical world, Thrun is also trying to transform higher education by taking the student out of the classroom and putting them online.
Inspired by the Khan Academy,Thrun's start-up, Udacity, is a company that gives free university-level classes in computer science. Thrun's ultimate goal for Udacity is much loftier.
"Udacity aspires to be a university, that may be a little pretentious, but what we really want to do is become an entire university," Thrun said.
Thrun's first class in artificial intelligence in 2011 attracted 160,000 students internationally and classes on Udacity have continued to grow since then, he said.