Business News

CCTV Script 12/02/18

— This is the script of CNBC's news report for China's CCTV on February 12, Monday.

Uber has settled its courtroom battle with Alphabet's self-driving car unit Waymo. the news came as a surprise to many who had been following the lawsuit, yet the outcome is seen as a win-win situation for both Waymo and Uber.

The settlement comes like this -

Uber will pay Waymo a 0.34 percent equity stake amounting to about 245 million dollars at Uber's recent 72-billion-dollar valuation, the companies said Friday, after days of courtroom theatrics.

Uber has also agreed not to incorporate Waymo's confidential information into its hardware and software, though Uber CEO Dara Khosrowshahi writes in a statement that he doesn't believe his company used any of Waymo's trade secrets in the first place.

The case started in February 2017. Waymo said that when Uber acquired the start-up Otto, founded by star Google engineer Anthony Levandowski, in late 2016, Levandowski brought some 14,000 Google files with him, some of which contained Waymo trade secrets. Uber rebutted that its self-driving sensor designs were unique and that Levandowski's actions were unrelated to his work at Uber.Waymo said Uber's LiDAR circuit board closely resembled its own design.Technology called LiDAR is central to self-driving car development. LiDAR stands for "Light Detection and Ranging." It uses pulsating laser beams to measure the distance between objects and can be used to make three-dimensional representations of them.In self-driving cars, it is used to identify people, bicyclists, driving lanes, and other objects an automated vehicle would need to "see" in its path. That is why Waymo accused Uber of using at least eight Waymo trade secrets in its self-driving cars.

The key witness for this case, Levandowski has "pleaded the Fifth" throughout this case, which is the protection afforded by the American constitution to not say anything that could incriminate oneself. Therefore, the case had been trapped in a deadlock of lacking of hard evidence that Uber stole trade secrets.

Then, why a settlement represents a win-win situation?

Industry insiders offered the same cynical explanation: Alphabet actually owns a stake in Uber through its venture capital arm, Google Venture, and Google simply wanted to protect its underlying investment in Uber. With an equity settlement, Google now owns more of Uber than it did before.

[SANTOSH RAO, MANHATTAN VENTURE PARTNERS HEAD OF RESEARCH] "This case, Google probably thought, they're also an investor in Uber. So the Google venture invests there. So there's a lot of cross-pollination going on between the companies, so I don't think they want to disrupt the flow. In the end, it's all about getting autonomous cars out there. I think they don't want to disrupt each other. Settle it amicably."

Uber plans to have a public IPO in 2019, and apparently an exhausting lawsuit would do no good to the company. In the end, Waymo gets a payment, which is under terms that Uber's board could swallow. It means that Uber's settlement with Waymo doesn't require it to pay out a particularly large sum of money or change its self-driving car plans, which is a good news for Uber.

Ultimately, the settlement gives both sides a bit of what they wanted, while it's hard to say, if either side is completely satisfied.

CNBC's Qian Chen, reporting from Singapore.