Rivian spinoff Mind Robotics valued at $3.4 billion in new funding round

[portdirect]

There is another angle here that is worth separating from the broader automation debate.

The issue is not whether industrial robotics is useful. It clearly could be. The governance question is whether Rivian shareholders are fully protected if Mind Robotics becomes deeply tied to Rivian’s factories, data, and future automation spend.

Rivian’s own 10-K already flags this concern. It says RJ’s roles with Also and Mind Robotics may create duties that conflict with his duties to Rivian. This is not an accusation or my theory. It is Rivian’s own risk disclosure.

The future transfer-pricing question matters. If Mind becomes a major supplier to Rivian, Rivian shareholders bear 100% of the cost of those purchases, while Rivian only owns a minority stake in Mind. If the terms are not clearly arm’s length, value could shift from the public company to the private company. That concern is amplified by RJ’s Mind-specific economic upside.

That is also why RJ’s Rivian pay package is relevant, as discussed in other threads. A charitable read is that the board is trying to keep him economically aligned with Rivian’s stock price, operating income, and cash flow. That helps. But it does not eliminate the conflict, because he also has separate upside through Mind. If the Rivian package looks difficult to realize, shareholders are entitled to ask whether incentives could drift toward value creation outside Rivian (that Rivian itself created).

So the fair question is simple: if Rivian’s factories, data, engineering work, and future spend help build Mind Robotics, what protections ensure Rivian shareholders benefit first?

After all, Rivian shareholders funded the environment that incubated this opportunity.

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[captainjp]

There is another angle here that is worth separating from the broader automation debate.

The issue is not whether industrial robotics is useful. It clearly could be. The governance question is whether Rivian shareholders are fully protected if Mind Robotics becomes deeply tied to Rivian’s factories, data, and future automation spend.

Rivian’s own 10-K already flags this concern. It says RJ’s roles with Also and Mind Robotics may create duties that conflict with his duties to Rivian. This is not an accusation or my theory. It is Rivian’s own risk disclosure.

The future transfer-pricing question matters. If Mind becomes a major supplier to Rivian, Rivian shareholders bear 100% of the cost of those purchases, while Rivian only owns a minority stake in Mind. If the terms are not clearly arm’s length, value could shift from the public company to the private company. That concern is amplified by RJ’s Mind-specific economic upside.

That is also why RJ’s Rivian pay package is relevant, as discussed in other threads. A charitable read is that the board is trying to keep him economically aligned with Rivian’s stock price, operating income, and cash flow. That helps. But it does not eliminate the conflict, because he also has separate upside through Mind. If the Rivian package looks difficult to realize, shareholders are entitled to ask whether incentives could drift toward value creation outside Rivian (that Rivian itself created).

So the fair question is simple: if Rivian’s factories, data, engineering work, and future spend help build Mind Robotics, what protections ensure Rivian shareholders benefit first?

After all, Rivian shareholders funded the environment that incubated this opportunity.

Rivian assembly currently utilizes Mind Robotics equipment

 

[portdirect]

Rivian assembly currently utilizes Mind Robotics equipment

That actually makes the governance question more concrete.

If Mind is already part of Rivian’s production environment, then this is not just a theoretical future concern. The relevant questions are whether Rivian is paying Mind, whether those terms are arm’s length, whether they were approved by independent directors, and whether conflicted executives are recused from Rivian’s side of the decision.

I am not saying the arrangement is improper. It may be a good operating decision. But if Rivian factories helped incubate Mind and Rivian is now using Mind equipment, shareholders should expect clear governance around pricing, data access, factory access, and who captures the upside.

 

[captainjp]

Mind originated as a spin-out of Rivian’s in-house assembly equipment. The physical equipment and software complement was already in-use before Mind was formed.

 

[skyguyscott]

There used to be an old joke about the threat of communism: The communists are going to hang the capitalists, and the capitalists will sell them the rope.

Here we read in real time it's modern corollary: "Yes, yes, AI is going to destroy humanity, but am I going to get my share of the profits, or are shareholders going to get cheated?

This perfectly encapsulates the very factors (greed, mostly) that will allow AI to end us all.

 

[mkhuffman]

...;
So here's some questions to ponder. Not long ago, at the advent of the internet, you'll recall the tech bros were spinning predictions of flowering democracy, deeper human connections, and with easy access to the sum of accumulated human knowledge, an explosion in education, reductions, if not elimination of poverty worldwide, etc. How has that actually turned out? What factors prevented the rosy predictions from being fulfilled? Are those same factors at play in the AI revolution?
...

Good questions, but I feel the predictions were not warranted at the time, and I doubt those predictions were widespread. People can say whatever they want, but why would a giant network create a flowering democracy? I don't want a democracy anyway. I want a representative republic, with representatives that are accountable to the people. Democracies turn into tyranny.

AI is not the same as a giant network. As you know, AI enables automation of things that were never able to be automated before. The results are likely to be the same as the results of automating tasks in the past: quality of results improves and people have more time to do work that is more rewarding. That is the logical outcome, because historically that has been what has happened.

Does it mean AI will be perfect and no bad outcomes will occur? Of course not. Human beings are flawed, and human beings make mistakes. And human beings will do things with AI that hurt others. But history is a good guide, and history proves automation makes life better for everyone, overall.

 

[Oldsmobile_Mike]

Back OT, what's the long game here? I'm assuming they're planning on selling robots to other manufacturing companies? $3.4B seems an awful lot for a company that only has robots operating at one Rivian factory. #shrug

 

[Hillbilly]

Just what the USA needs, a country full of factories that are union proof/wage stagnate/be fret of benefits and filled with complacent, mindless robotic slaves - every venture capitalist's wet dream.

You do know that eventually if enough people are displaced from their employment that legislation will get pushed through to address the inequity? Ultimately automation will result in a better quality of life for everyone.

 

[CrazyOne]

Back OT, what's the long game here? I'm assuming they're planning on selling robots to other manufacturing companies? $3.4B seems an awful lot for a company that only has robots operating at one Rivian factory. #shrug

Looks like an attempt to cash in on AI hype.

 

[captainjp]

Looks like an attempt to cash in on AI hype.

Not sure I agree with that statement. Mind robotics is offering a tangible product, of which AI is not. Now, if Rivian was offering RA as the product, your statement would ring more-true.

 

[CrazyOne]

Not sure I agree with that statement. Mind robotics is offering a tangible product, of which AI is not. Now, if Rivian was offering RA as the product, your statement would ring more-true.

I am sure company is legit. But how are the Rivian IPO shareholders doing? I am one. Overall, I didn't lose money, because of luck or skill or both. Most did lose money.

It's about valuation. Few years back it was EVs and now it's AI.

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