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Hold onto your seats — the whole self-driving car revolution just accelerated. Feds have told Alphabet ’s ( GOOGL ) Google Car chief that under federal law, a computer can count as the “driver” in vehicles that lack things like steering wheels and brakes built for humans to control. “We agree that Google’s Self-Driving System may be deemed to be the driver” for purposes of compliance with certain provisions of law, the feds’ letter to Google says, “given that there will be no foot (or even hand) control to be activated, indeed, given that the SDS will have neither feet nor hands to activate brakes.” The Feb. 4 Google Car letter from the National Highway Transportation Safety Administration  amounts to an abrupt shift in thought after years of carmakers’ developing autonomous cars by focusing on the human driver as final decision maker on the road (which actually means semi-autonomous cars). The letter makes a fork in the road, with both paths likely going forward. Will cars free of human drivers get a final go? Some issues still “must be resolved through rule-making or other regulatory means,” the letter notes. Besides Alphabet,  Apple ( AAPL ) is rumored to be working on self-driving cars in its Project Titan. Electric carmaker Tesla Motors ( TSLA ) has rolled out advanced semi-autonomous driving and inched into full autonomy. The Tesla Summon feature even lets cars maneuver largely alone to pick up owners in their driveway as owners keep an eye on what’s happening. BMW has a Remote Control Parking function on its 7 Series cars, too. Automakers  Toyota ( TM ), Volkswagen ( VLKAY ), Ford ( F ), Volvo, Daimler ( DDAIF ) and others have been testing self-driving cars. Tech firms working on aspects of the innovations include Nvidia ( NVDA ), NXP Semiconductors ( NXPI ), Mobileye ( MBLY ) and others, in partnership with carmakers. How Does A Google Car Work? Google’s approach has stood largely alone, sans humans. Addressed to Chris Urmson, director of the Self-Driving Car Project at Google, the NHTSA letter responds to the company’s November request for interpretation of federal motor vehicle safety standards. “According to Google, those self-driving vehicles (SDVs) are fully autonomous motor vehicles, i.e., vehicles whose operations are controlled exclusively by a Self-Driving System (SDS). The SDS is an artificial-intelligence (AI) driver, which is a computer designed into the motor vehicle itself that controls all aspects of driving by perceiving its environment and responding to it. Thus, Google believes that the vehicles have no need for a human driver,” the letter says. It goes on to say, “In this response, NHTSA addresses each of Google’s requests for interpretation and grants several of them.” A Reuters report Wednesday delved into the details of the NHTSA letter to Google . Safety Worries In Human-Computer Handoff So what happens with insurance when AI is driving? “The insurance aspects of this gradual transformation are at present unclear,” the Insurance Information Institute (III) said in a February 2015 topic paper on self-driving cars . It summed up the special case with Google at the time this way: “Google, the company that has been the public face of self-driving cars in the United States for the past few years, announced in May 2014 that it is building a fleet of vehicles without a steering wheel or role for a driver because its technology has not been able to successfully switch control back and forth from automated driving to the driver in an emergency and does not expect to be able to accomplish that soon. The prototype will have a top speed of 25 mph and will be summoned by a smartphone, in effect serving as an automated taxi service.” The III went on, “Other companies building autonomous cars said that they will continue to work on vehicles that will be able to safely make that switch.” But before mass production of such cars would be possible, it added, the size and cost of sensors powered by lasers used to steer the cars must come down. In the NHTSA response to Google this month, the agency says that Google has been concerned that giving human occupants controls to operate things like steering and braking “could be detrimental to safety” amid human attempts to override a self-driving system. Feds Budget Billions For Autonomous Car Tests Tuesday,  President Obama’s $4.1 trillion federal budget proposal for fiscal 2017 lays out $3.9 billion to test, over 10 years, how connected cars and self-driving cars can operate with infrastructure and each other. The budget, which would levy a $10.25-a-barrel tax on oil, “calls for a 21st Century Clean Transportation initiative ,” Obama said in his budget message, “that would help to put hundreds of thousands of Americans to work modernizing our infrastructure to ease congestion and make it easier for businesses to bring goods to market through new technologies such as autonomous vehicles and high-speed rail, funded through a fee paid by oil companies.” Autonomous car testing is planned, the Department of Transportation said last month, in “corridors throughout the country” in order to accelerate development and adoption of “safe vehicle automation through real-world pilot projects.”