Anki made its debut in June at Apple’s WWDC, where the San Francisco-based startup unveiled its first product, Anki Drive, futuristic toy cars that can race around autonomously and be played with via iPhone. On stage, Apple CEO Tim Cook praised the company for “creating an entirely new set of experiences,” and predicted it was “going to be super successful,” a high blessing that all but positioned Anki as the Hot Wheels for the modern age.

But as Anki cofounder Boris Sofman tells Fast Company, his ambitions are far grander. His miniature, autonomous cars aren’t just built for childish amusement–they’re actually a play to compete with companies like Google in a slew of mass markets. “For us, the big vision is that we’re a robotics and artificial intelligence company–not necessarily a toy company,” Sofman says. “[We’re] using this as a stepping stone to do more advanced things.”

Today, Anki launched Drive to the world, and, even as a stepping stone, it’s an incredibly compelling product. Users can pit their cars against their AI-powered counterparts, zooming around a track and competing in a variety of scenarios–races, battles, and so forth–while using the iPhone as a steering wheel and control center. Sofman and team like to call it “the first video game in the real world.” But the larger promise of Anki is the underlying technology it’s inventing in the process, which could make the startup competitive in a whole host of industries. “This is a way to zigzag through a lot of really compelling products to get to the Holy Grails: full-blown autonomous driving, having [robotic] helpers around the house, health-care applications,” Sofman beams.

Anki Drive itself is pretty remarkable. To start, just unroll the Anki track on the floor and place the Bluetooth-enabled cars on the mat. You can set which ones act as the computer via iPhone and which ones you’d like to control. As the race begins, the AI-controlled cars will start circling the track autonomously. The cars are smart enough to use algorithms to both figure out which direction to go and how fast and most efficiently to get there. In Anki Drive’s free companion app, users can upgrade their vehicles with Mario Kart-style features: higher top speeds, better acceleration, weapons. The virtual changes are reflected in the physical world: If your car “shoots” and virtually hits another car on the track, the “lasers” will knock it off the runway. There are even tractor-beam features, and Sofman says the company will continue to add more scenarios and digital components down the road, updated from the cloud. (Oil slicks!)

As a toy, it’s fun, certainly novel, and likely to be a hot seller this holiday season. But there are some potential downsides, if I can channel my inner child for a moment. For one, you can’t fully control your own car; rather, Anki found it more practical to use artificial intelligence to assist you in navigating the track. Thus, there are only a few essential controls: Users can sway their iPhones forward and back to control speed, and from side to side to maneuver to the outside or inside of the track. But you won’t be screeching tires in stylish, Tokyo Drift-style turns: Anki says those would be too difficult for the user to perform. (And for good reason: If you scaled up the cars to real-world proportions, Anki says it would be the equivalent of driving down the highway at 250 miles per hour, with a “tenth-of-an-inch clearance on either side.”)

Anki cofounders Mark Palatucci, Boris Sofman, and Hanns Tappeiner

What’s more, at $199, Anki Drive is expensive, especially since it requires an iOS device to use–potentially prohibitive for kids who don’t own an iPhone or iPod Touch, and whose parents don’t want to share their expensive Apple gadgets with them for extended periods.