I will preface this newsletter by saying that, despite my best efforts, I still can’t get a potato delivered to my house via drone.
I’ve been excited to get said potato for almost three years now—ever since a friend rang me up and told me that, exactly 6.2 miles away from my home in Arkansas, they were flying drones out behind a Walmart. Naturally, I abandoned my desk and drove on over to see them for myself. And I ended up writing about the operation, startup Zipline’s first outpost in the U.S., for our magazine back in Dec. 2021.
At the time, there were only a handful of people on the delivery list, and my apartment wasn’t in range. I really wanted to see a potato drop out of the sky, so I tried again in early 2023 when I had moved but received a message back about a month later that Zipline was only flying close to its home base in Pea Ridge and couldn’t deliver to me. Earlier this week, I thought I’d check again. My house is still out of pocket—no potato. (For all those wondering: No, DroneUp, which also makes deliveries with Walmart in Arkansas, won’t deliver a potato to my house either.)
But while I will continue to gripe about the potato until it drops from the sky, things have never looked better for commercial drone delivery in the U.S. Last year, the Federal Aviation Administration (FAA) started issuing exemptions for companies to fly drones beyond visual line of sight, known in shorthand by people in the industry as “BVLOS.” What exactly does that mean, you ask? Drone operators who are granted the exemption no longer have to have a human watch a drone fly for the entire course of its journey. In other words, a huge burden that has prevented companies from true scale has been lifted for some.
This was a huge step for the industry when the FAA offered its first exemption to UPS, which uses drone startup Matternet for deliveries, and uAvionix at the end of last year. Shortly after, the FAA extended approvals to Zipline and, just earlier this year, DroneUp and Amazon’s Prime Air, too.
“We’ve seen a pretty big acceleration in the last few years, and we’re starting to see the regulatory system move a little faster,” says James Grimsley, who runs the Choctaw Nation of Oklahoma’s drone program and was selected by Secretary of Transportation Pete Buttiegeg to help advise the FAA on integrating drones into the airspace. The FAA, which is expected to release the initial draft of its formal BVLOS legislation later this year, is making a “major leap,” Grimsley explains, by reorienting its rules away from its historic dependence on human eyesight and relying on technology.
These changes are, indeed, allowing companies to scale their U.S. operations.
Zipline told me, without providing any specific numbers, that since the approval they’ve tripled the number of U.S. customers they are serving and also increased their U.S. service areas. That includes expanding Arkansas deliveries into Missouri (though still not to my house). Amazon Prime Air says they are expanding into the West Valley Phoenix metro area later this year. Matternet is planning to launch a delivery service in Mountain View, Calif. And the FAA has started allowing multiple carriers, including Alphabet’s Wing, to operate all at once in Dallas.
The irony is that, as these technologies start to become prolific, they face the two next frontiers: 1) Making the financials of scale work. That’s already led to difficult choices for DroneUp. And 2) The contentious introduction into society. Amazon Prime Air is already seeing some resistance, as residents of a small town north of Houston, including its mayor, have complained that the drones are too noisy. (In response to this, Amazon pointed me to statements made by the city manager in a meeting that indicated that, during his team’s own testing, the noise levels stayed below the city’s ordinance limit. Amazon also said that its new drone design will be quieter.)
The potatoes are starting to drop. It doesn’t look like everyone wants them to.
A quick note… In observance of Labor Day in the U.S., you won’t be receiving this newsletter in your inbox on Monday. Enjoy your long weekend, and see you Tuesday!
Jessica Mathews
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NEWSWORTHY
Telegram’s problems. The criminal charges brought against Telegram CEO Pavel Durov in France are catastrophic for the company, the Financial Times warns. The social network slash messaging app is a loss-maker and has raised around $2.4 billion in debt financing. Now that the platform is associated with child sexual abuse material, it’s looking less likely that Telegram can hold an IPO anytime soon, but its bonds will mature in 2026. The newspaper also reports that the European Commission is investigating Telegram’s reported user numbers, which were just under the threshold needed to start imposing serious content moderation rules on the company.
Intel’s options. Intel is reportedly exploring a potential split of its design and “foundry” contract chipmaking businesses, as well as the possible scrapping of new factory build-outs. According to Bloomberg, Morgan Stanley and Goldman Sachs are helping the company figure out how to survive its dreadful slump, which is largely down to Intel falling behind in AI chips while failing to attract enough big customers to its foundry business.
Alexa taps Anthropic. Amazon’s revamped Alexa virtual assistant will reportedly be primarily powered by Anthropic’s Claude chatbot. According to Reuters, Claude performs better than Amazon’s in-house AI model. Amazon, which has invested around $4 billion in Anthropic, will apparently charge $5-$10 per month for the smarter version of Alexa, leaving the classic (dumber) version as a free offering. Meanwhile, Apple and Nvidia are reportedly in talks to join OpenAI’s new funding round.
SIGNIFICANT FIGURES
185 million
—Meta AI’s number of weekly active users, as disclosed by CEO Mark Zuckerberg. “Growing quickly, and we haven’t even rolled out in UK, Brazil, or EU yet,” he wrote. Those territories require Meta to get users’ consent before training its models on their personal data, but it doesn’t want to take that route. OpenAI says ChatGPT has over 200 million weekly active users.
IN CASE YOU MISSED IT
Nvidia stock is sinking. Wall Street analysts say it’s still a buy, by Will Daniel
Elon Musk’s X will shut down its SF headquarters in two weeks—on Friday the 13th, by Kali Hays
Southeast Asia becomes the ‘most important’ overseas market for Chinese EVs as the West turns to tariffs, by Lionel Lim
Generative AI is accelerating the spread of fake reviews and malicious apps, by Sage Lazzaro
Elon Musk threatens a top Brazil judge who moved to block X in the country, by Marco Quiroz-Gutierrez
Instagram reportedly explores real-time integration of Spotify, by Chris Morris
BEFORE YOU GO
Musk beats Dogecoin suit. Elon Musk and Tesla are in the clear over their promotion of the Dogecoin cryptocurrency, which a group of enraged investors claimed was a pyramid scheme, Bloomberg reports. According to U.S. District Judge Alvin Hellerstein, when Musk tweeted “One word: Doge” and announced that Tesla would accept the memecoin as payment for merch, that was “aspirational” rather than something any “reasonable investor could rely upon.”