Tesla took a bold step into the autonomous future on Sunday, launching its long-awaited robotaxi service in Austin, with a high-profile rollout that saw early users ride in Tesla Model Y vehicles operating on Full Self-Driving (FSD) software, although the EV company employees remained in the passenger seat for safety oversight.

CEO Elon Musk announced a flat rate of $4.20 per ride on Sunday and the debut of a new robotaxi app and website. Tesla made it clear that this launch was not a test—it was the beginning of a larger campaign.

The rollout comes at a critical time as Musk continues to pitch Tesla not just as an electric carmaker, but as an AI-driven tech company poised to disrupt urban transportation. The launch was accompanied by social media buzz, livestreams from early riders, and an announcement that more cities could soon follow.

A Growing Market — and Growing Rivalry

While Tesla’s launch was a media spectacle, its robotaxi vision faces fierce and growing competition—especially in Austin, where other autonomous driving startups are aggressively scaling up operations. Among them is Zoox, Amazon’s self-driving car unit, which has already made a significant strategic move by opening its first robotaxi production facility in Austin last week.

Unlike Tesla, which repurposes standard vehicles like the Model Y for autonomous operations, Zoox is developing a fully custom-built, bidirectional, electric robotaxi with no steering wheel or pedals—designed from the ground up for driverless mobility. Its vehicle architecture is focused entirely on autonomy and passenger comfort, giving it a distinctly different approach from Tesla’s AI-first, vision-only model.

With Zoox now in the picture, analysts expect the robotaxi competition to intensify rapidly, especially in markets like Texas where regulatory oversight remains minimal compared to states like California. Tesla may have had a first-mover advantage with a public launch, but Zoox’s purpose-built hardware and Amazon’s logistical clout give it a long-term edge in scalability and network integration.

Other rivals are also accelerating. In March, Google’s Waymo launched a robotaxi service in Austin through a partnership with Uber, offering autonomous rides in Chrysler Pacifica minivans. Meanwhile, Canadian startup Waabi, backed by Nvidia and Uber, is preparing to roll out fully driverless freight trucks across Texas highways.

Austin has quickly become ground zero for what some now call the “robotaxi arms race”—with companies testing everything from ride-hailing to freight, all powered by increasingly advanced AI and sensor technologies.

Wall Street Bullish on Tesla

Despite regulatory concerns and technical limitations, Tesla’s robotaxi launch has drawn bullish reactions from investors. Dan Ives, a well-known analyst with Wedbush Securities, called the launch “the start of their biggest chapter of growth and valuation upside.”

“The Golden Age of Autonomy starts on Sunday in Austin for Tesla,” Ives said. “My view is, 20–35 cities in the next year, and once they start scaling Cybercab and get to true level 4, I believe it’s a Trillion Dollar valuation opportunity for Tesla.”

Ives’ optimism echoes a broader belief among Tesla bulls that the robotaxi business could become the company’s most valuable segment, far outstripping its vehicle sales in revenue and profit margins.

Tesla’s approach to autonomy has always been different. While competitors like Waymo and Zoox rely on expensive hardware—LIDAR, radar, and high-definition mapping—Tesla is betting on a leaner, AI-driven strategy using only cameras and neural networks. Musk argues this approach is more scalable and will ultimately dominate the industry.

Tesla AI, the division behind the robotaxi program, reinforced that claim on Sunday, saying: “It does not require expensive, specialized equipment or extensive mapping of service areas. It just works.”

But critics continue to question whether it actually does “just work.” Unlike its competitors, Tesla’s Full Self-Driving system is still officially rated as a Level 2 advanced driver-assistance system, meaning a human must remain alert and ready to intervene. Its safety record has drawn the attention of U.S. regulators. The National Highway Traffic Safety Administration (NHTSA) is actively investigating Tesla over crashes linked to Autopilot and FSD, and earlier this year, the company issued a recall affecting more than 2 million vehicles.

Experts say calling these cars “robotaxis” is premature.

That hasn’t stopped Tesla fans from celebrating the launch. Social media was flooded with videos and reactions from those who took the first rides, many of whom praised the smoothness of the experience—even if the vehicles still required a safety greenlight.

“We are approaching the window where we expected to have the app and showing everything,” Chuck Cook, one of the early invitees to try the Tesla robotaxi, said on X. “There looks like there will be a small delay in the distribution of the app for couple hours.”

But the cautious optimism stands in contrast to the aggressive timeline Musk has long promised. He first claimed Teslas would be fully autonomous by 2020, and a fleet of one million robotaxis would be operating by the following year. Those goals remain unmet.

Tesla has not disclosed a timeline for the wider public release of its robotaxi service. The company said it will expand to other cities “where approved,” suggesting a phased rollout dependent on local regulatory acceptance. That condition could prove difficult in cities with stricter rules or where safety concerns dominate public discourse.

Meanwhile, rivals like Zoox are laying the groundwork for broader deployment. With its own production facility now operational in Austin, Zoox could soon begin building a dedicated fleet, potentially leapfrogging Tesla in fully driverless service offerings.

For a very long time, Apple has not operated on the mantra of first-mover advantage, the benefits a company gains by being the first to introduce a new product or service to a market. Before the iPhone, we had Blackberry. Before the iPod, we had Sony Walkman. Before the Apple Watch, there was Pepple. But in all these categories, Apple won. Because Apple is peerless in understanding competitors’ misses and scaling great products.

So, when Apple comes into a category, it improves whatever that is there, scaling and owning the category. In other words, Apple is the grandmaster of first-scaler advantage, the competitive edge gained by the company that achieves the highest level of scale and market dominance within a specific category.

But there is one category that Apple’s playbook may not work if one waits a really long time to begin. That is the AI sector where Apple is well behind leaders like OpenAI, Google and Microsoft. But it seems the company  got the memo and wants to win, and there is one asset which has offered Apple a penalty at the injury time of the market soccer competition: “Apple is reportedly in early internal talks about acquiring Perplexity AI—a fast-growing AI-powered search startup—as part of its broader, increasingly urgent push into artificial intelligence.”

Apple needs to score this penalty if it wants to move to the next phase of this AI competitive era.

Apple Reportedly In Talks to Acquire Perplexity AI Amid Investors’ Lawsuit & Push for Own Search Engine

Apple is reportedly in early internal talks about acquiring Perplexity AI—a fast-growing AI-powered search startup—as part of its broader, increasingly urgent push into artificial intelligence.

According to Bloomberg, the discussions have taken place among top Apple executives, including Adrian Perica, Apple’s head of mergers and acquisitions, services SVP Eddy Cue, and other decision-makers leading the company’s AI efforts.

The move—still in its formative stages with no formal offer yet made to Perplexity—comes as Apple faces mounting pressure from investors and the broader tech industry to move more decisively into the AI race. It also follows a shareholder lawsuit that accuses the company of overstating its AI capabilities, a claim that triggered a staggering $900 billion loss in market value earlier this year.

The potential Perplexity deal would represent a rare pivot for Apple, which is known for building technology in-house rather than acquiring external firms. The last major purchase of this magnitude was its $3 billion acquisition of Beats Electronics in 2014. An outright acquisition of Perplexity, reportedly valued at about $14 billion, would easily eclipse that deal.

However, Apple’s options appear to be narrowing. While the company has been quietly integrating AI into its devices and services, it has fallen behind in the generative AI arms race dominated by OpenAI, Google, Meta, and even smaller disruptors like Anthropic and Mistral. Analysts have increasingly called on the company to consider bold moves—including acquisitions—to close the gap.

What Apple Wants from Perplexity

Perplexity AI, a startup positioning itself as the next-generation answer engine, uses large language models to provide citation-backed, real-time search results. Apple has reportedly discussed not only acquiring the company but also forming a strategic partnership. That could involve integrating Perplexity’s AI technology into Safari and Siri, dramatically reshaping the user search experience across Apple’s ecosystem.

According to Bloomberg, Apple has met with Perplexity several times in recent months and even explored a Safari integration—something Eddy Cue revealed during his testimony in the ongoing antitrust lawsuit against Google. Cue’s appearance underscored the stakes of Apple’s current deal with Google, which pays Apple roughly $20 billion a year to remain the default search engine on iPhones and Safari browsers.

But that partnership is now under legal scrutiny, and if regulators force Apple to unwind it, the company will need a robust, independent search engine of its own. That’s where Perplexity could become a critical asset—not just as a product, but as a source of high-end AI talent.

AI Talent War Intensifies

Apple, like its rivals, is deeply engaged in the ongoing war for AI talent. According to reports, it is even competing against Meta to hire Daniel Gross, co-founder of Safe Superintelligence Inc. and a former partner at Y Combinator. This signals Apple’s intent to shore up its AI leadership, especially after internal delays and public setbacks.

Earlier this year, the company postponed a major upgrade to Siri, part of its new “Apple Intelligence” suite, citing performance and integration challenges. The delay rattled investors and added to the perception that Apple was lagging in AI innovation.

The urgency behind Apple’s AI efforts has been amplified by a shareholder lawsuit filed on Friday, accusing the company of misleading investors by overstating the readiness and capabilities of its AI systems.

The lawsuit has brought further attention to Apple’s cautious AI strategy, which contrasts sharply with the aggressive rollout seen by rivals like Microsoft and Google. While Apple maintains a strong reputation for privacy and quality control, many believe that its secrecy and conservatism have left it vulnerable in an era defined by open innovation and rapid iteration.

Perplexity As A Key Piece of the Puzzle

Founded in 2022, Perplexity has quickly gained attention for offering a user-friendly, answer-focused alternative to traditional search engines. Its conversational interface, supported by citation-backed answers and updated with real-time data, sets it apart from competitors. The company recently raised $500 million in new funding, bringing its valuation to $14 billion.

Currently, Apple’s talks with Perplexity remain exploratory. But even the consideration of such a bold move suggests a major strategic inflection point in Cupertino. After years of AI hesitation, Apple appears ready to respond to investor pressure and industry momentum.

Amid soaring tensions in the Gulf following U.S. airstrikes on Iran’s nuclear facilities, U.S. Secretary of State Marco Rubio on Sunday urged China to use its leverage with Tehran to prevent any attempt by Iran to close the Strait of Hormuz — a move that has begun to upend the global oil market and further escalate the crisis.

“I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil,” Rubio said during an appearance on Fox News.

His remarks follow reports from Iranian state media suggesting that Iran’s parliament is backing a possible closure of the key maritime route. However, the final decision rests with the country’s national security council.

The Strait of Hormuz, a narrow but strategic chokepoint between Iran and Oman, is the most critical oil transit route in the world. In 2024, approximately 20 million barrels of crude oil per day — about 20% of global consumption — passed through the strait, according to the U.S. Energy Information Administration (EIA).

Iran’s threat to block the passage has sent shockwaves through global markets. While many believe the U.S. Navy, led by the Fifth Fleet based in Bahrain, would act swiftly to neutralize any blockade, some experts warn that the consequences may not be as short-lived or containable as assumed.

“They could disrupt, in our view, shipping through Hormuz by a lot longer than the market thinks,” said Bob McNally, president of Rapidan Energy and former White House energy adviser. “It would not be a cakewalk.”

Oil Prices React Swiftly

Global oil prices reacted immediately to the escalating standoff. At the start of Sunday’s trading session — the first since the U.S. bombed three Iranian nuclear facilities in Fordow, Natanz, and Esfahan — futures rose sharply.

U.S. crude climbed $1.76, or 2.38%, to $75.60 per barrel.

Brent crude, the global benchmark, surged $1.80, or 2.34%, to $78.81 per barrel after earlier spiking over 5.7% to reach $81.

Analysts at Goldman Sachs and Rapidan Energy warned that if Iran follows through with a closure of the strait, oil prices could shoot above $100 per barrel, especially if the disruption is prolonged.

China Holds a Key Card

Iran exports an estimated 1.6 million barrels of oil per day — nearly 80% of which goes to China. That heavy reliance on the strait makes Beijing a crucial player in the unfolding crisis.

Rubio’s remarks underline growing U.S. expectations that China, despite its alignment with Iran in broader geopolitical terms, would intervene diplomatically to preserve its own energy security and global market stability.

“It would be economic suicide for Iran to close the strait,” Rubio warned. “It would hurt other countries’ economies a lot worse than ours. It would be, I think, a massive escalation that would merit a response, not just by us, but from others.”

Iran’s Response and Escalation Risk

Iranian Foreign Minister Hossein Amir-Abdollahian responded defiantly on Sunday, saying the Islamic Republic “reserves all options to defend its sovereignty.” The statement came less than 24 hours after the U.S. confirmed a coordinated air assault on three of Iran’s top nuclear sites — marking the most direct American military action against Iran in recent years.

While Iran’s parliament has supported closing the strait in retaliation, the decision ultimately lies with the country’s Supreme National Security Council. That makes the current phase one of intense uncertainty, where rhetoric could quickly translate into action.

Closing the Strait of Hormuz would not only impact oil shipments but also those of liquefied natural gas (LNG), as Qatar, another major Gulf exporter, also relies on the route.

The geopolitical tremor has come at a time when global energy markets were already jittery over supply cuts, a sluggish Chinese economy, and increasing volatility from Russia’s war in Ukraine. Now, with a direct U.S.-Iran military confrontation and a potential maritime blockade looming, traders are bracing for further instability.

Analysts believe that whether the situation de-escalates will hinge on multiple diplomatic levers: pressure from China, strategic restraint from Iran, and a broader international response led by Washington to keep the strait open.