Self-driving-car developers initially held a similar philosophy of data maximization. They generate video from arrays of cameras inside and outside the vehicles, audio recordings from microphones, point clouds mapping objects in space from lidar and radar, diagnostic readings from vehicle parts, GPS readings, and much more.

Some assumed that the more data collected, the smarter the self-driving system could get, says Brady Wang, who studies automotive technologies at market researcher Counterpoint. But the approach didn’t always work because the…