For over 20 years, many models have been proposed to explain the variability of AO0235+164. Among them, the most favorable has been micro-lensing. We have made a series of VLBI observations on this source in order to better understand its nature. The resultant maps indicate dramatic changes in the position angle of the jet between observations as well as a correlation between the intensity of the VLBI core and flux outbursts which occurred between the observing sessions. These characteristics, in conjunction with other arguments, suggest that the source variability is intrinsic, i.e. microlensing is of minor importance. We suggest two models: 1) a model in which the jet starts at a very small angle to the line of sight and then curves away to become about 6deg at about 1 mas from the core; and 2) a CME (Coronal Mass Ejection) model that also may explain the violent variability in intensity, polarization position angle, and jet direction in AO0235+164