It’s no secret that autonomous driving technology can’t really handle snowy conditions yet. That’s why all the self-driving car prototypes are being tested in sunny places like Arizona and (sometimes sunny) San Francisco.  

But winter is coming for self-driving technology—metaphorically, at least. The once red-hot autonomous technology sector that spawned a parade of startups and acquisitions is suddenly looking like it’s lost its way. 

A Crunchbase examination of 14 autonomous tech companies that have gone public in the past couple of years, via IPOs or SPACs, found that their market valuations have plunged by 81% on average from the time they became publicly listed. Among the worst hit, Velodyne, which makes the LIDAR laser sensors that self-driving cars use to map the environment, and self-driving truck software maker Embark Technology, down 95% and 97% respectively. 

And a recent Bloomberg Business Week article made the case that self-driving technology, in its current form, is doomed to be stuck in an endless testing loop. Until a new computing breakthrough is achieved that can deliver something akin to human reasoning, the binary computer technology currently used for self-driving cars will never be equal to the task; There is simply no way to predict every potential “edge” case that can occur on the road—no matter how much testing is done. 

The next thing to watch is whether any of the Big Tech or Big Auto companies decide to cut bait. Alphabet has already spent billions developing its Waymo self-driving cars. GM’s Cruise has been testing giant fleets of self-driving vehicles on San Francisco streets for years. Apple and Amazon both have their own self-driving projects underway.  

As the economy teeters on the brink of a potentially major downturn, the status of these projects will be telling. Will the self-driving groups get shrunk or potentially even shut down as the corporations look for ways to cut costs? If that happens, the industry would likely be set back significantly. 

As readers of this newsletter are likely aware, every transformative technology goes through its own “winter,” (or a “trough of disillusionment” to use the term coined by industry research firm Gartner), as the technology falls short of initial, overhyped expectations, and funding and interest dries up. Artificial intelligence famously went through a long, cold winter in the 1970s. Crypto has been through several already. 

So self-driving believers will keep a stiff upper lip and persevere through the inclement weather. And they’ll eventually be proved right, but it might be quite awhile before things thaw out. 

Alexei Oreskovic
@lexnfx
alexei.oreskovic@fortune.com
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If you want to know more about how to use A.I. effectively to supercharge your business, please join us in San Francisco on December 5th and 6th for Fortune’s second annual Brainstorm A.I. conference. Learn how A.I. can help you to Augment, Accelerate, and Automate. Confirmed speakers include such A.I. luminaries as Stanford University’s Fei-Fei Li and Landing AI’ Andrew Ng, Google’s James Manyika, and Darktrace’s Nicole Eagan. Apply to attend today!

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A.I. IN THE NEWS

Big Bucks for Generative A.I. If you’ve been wondering where venture dollars are going these days, look no further than the red hot field of Generative A.I. On Monday, Stability AI, the maker of A.I. art generator Stable Diffusion, announced that it has raised $101 million, with a valuation that Bloomberg reported was around $1 billion. And on Tuesday, Jasper, a not quite 2-year-old startup that uses A.I. to create marketing content like blog posts and website copy, raised $125 million at a $1.5 billion valuation.  

EYE ON A.I. TALENT

Convesational A.I. company Cognigy has appointed Hardy Myers as senior vice president of business development and strategy, according to a company announcement. 

Axelera AI, a Netherlands-based startup focused on creating chip-based A.I. capabilities, has appointed Jonathan Ballon as independent, non-executive director. 

EYE ON A.I. RESEARCH

A closer a look at A.I. and job interviews. A new paper by two Cambridge University researchers takes aim at A.I. products that claim to reduce race and gender bias in hiring. The study, published in the journal Philosophy and Technology, focuses on commercially available human resources products that "objectively" assess job applicants’ CVs and video interviews. 

The study did not test the actual products, but rather, looked at their marketing materials such as white papers and statements by company representatives, and analyzed the claims within the context of gender studies and critical race theory. According to the study, A.I. recruitment tools rely on a fundamental misunderstanding of what gender and race are, and as a result, can be counterproductive and can reinforce deeply entrenched biases. 

“Proponents of AI-powered hiring tools promise that AI-powered facial and body language analysis offers greater and more incisive insight into a candidate’s ‘authentic’ thoughts and feelings,” the authors write. 

But, they go on to say, attempting to identify “innate skills and attributes” that are “expressed in the same way by all bodies” is inherently problematic: 

“The characteristics and personality traits that are deemed desirable to employers are neither performed nor interpreted universally and objectively: they are contextual and mediated by racialized and gendered ways of reading the body.” 

FORTUNE ON A.I.

A robot ‘artist’ makes history by answering questions in British Parliament: ‘Although not alive, I can still create art’, by Prarthana Prakash 

 A.I. chatbot is leading a Danish political party and setting its policies. Now users are grilling it for its stance on political landmines,by Alice Hearing 

A.I.-driven robots are cooking your dinner, by Stephanie Cain

BRAINFOOD

Dr. Doom vs A.I. The debate about automation and its impact on jobs is as old as the debate about New York bagels versus Montreal bagels (NY is superior, to be clear). But the topic received a renewed boost into the public consciousness this week after Nouriel Roubini, the NYU Stern School of Business professor known as Dr. Doom, weighed in on the subject.  

Speaking at Yahoo Finance’s All Markets Summit, Roubini warned that A.I. is set to massively disrupt jobs in the future—both routine jobs that involved repetitive tasks as well as “creative” jobs that were once considered less vulnerable to automation, such as screenwriters and musical artists. Roubini, who earned his dour moniker by predicting the 2008 recession, appears to have a not wholly pessimistic view of A.I. He pointed out that the massive disruption will also come with great benefits. It’s a topic he apparently goes into in greater depth in his new book, MegaThreats: Ten dangerous trends that imperil our future and how to survive them.