Ford is placing a billion-dollar bet that a small Pittsburgh-based company will help it launch fully self-driving vehicles within the next four years.
The automaker said Friday it has acquired a majority stake in Argo AI, a startup focused on artificial intelligence that is headed by two executives who once worked on the Google and Uber self-driving-vehicle teams.
Ford CEO Mark Fields said the investment, spread over five years, will help Ford solidify its own self-driving system. Not only that, but there’s a possibility the companies eventually could license their technology for others to use.
“We think this has the potential to create significant value in the company,” he said. “One, it allows us to bring autonomous vehicles to the marketplace in the near term, but even after that, there’s this ability to potentially license it to other OEMs. This is a way to get all the benefits and look at ways to unlock value in the investments that we make.”
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“There’s a possibility the companies eventually could license their technology for others to use.” — Mark Fields, Ford CEO
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Ford has previously stated its intent to deliver Level 4 autonomous vehicles—those in which a driver’s supervision is not required—by the end of 2021.
Chief technology officer Raj Nair said a number of current Ford employees working on autonomous technology will become Argo employees. Employees working on the autonomous-vehicle platform are likely to stick with Ford; employees working on the virtual-driver system that Argo is charged with developing are likely to shift to the new company, where they’ll work under the leadership of Argo co-founders Bryan Salesky and Peter Rander.
Salesky is Argo AI’s CEO. He had previously been a member of Google’s self-driving-car project, while chief operating officer Rander had worked on Uber’s team. Both are graduates of Carnegie Mellon University, whose alumni are playing an increasingly central role in the development of autonomous vehicles.
Argo is expected to be staffed with as many as 200 employees by the end of 2017, including both Ford veterans and a number of newcomers the company is aggressively looking to attract. The company will continue to be headquartered in Pittsburgh, with additional operations starting in southeast Michigan and the Bay Area.
The investment comes at a time when automakers, suppliers, and tech companies ramp up their development of artificial-intelligence applications. AI was a key topic at CES last month, with industry leaders such as Nvidia announcing partnerships at a feverish pace.
Ford acquired SAIPS, an Israeli artificial-intelligence company, last year. Separately, much of the automaker’s senior autonomous-development leadership has been in place for more than a decade, which gives the company perhaps the most experienced and consistent team in the industry. Fields chafed at the notion that the Argo investment is meant to shore up weaknesses in the existing autonomous system; he said the move will add “robustness” to the current state of the company’s technology.
“It’s not a hole, but it’s a strengthening of the virtual-driver-system team,” he said. “I think we have a good team, but when you put it under the leadership of two pioneers . . . it’s a win-win-win situation, coupled with our ability to integrate it back into the vehicle and bring that all to scale.”
Nothing changes for the company’s intention to put its resources into developing fully self-driving vehicles. Unlike competitors such as General Motors, Ford has eschewed the idea of developing an autonomous vehicle that may sometimes require a handoff back to a human driver.
This is the largest of several investments Ford has made over the past year as it intently pursues a self-declared transformation from an automotive company into a mobility company. That push started in March 2016 with the creation of Ford Smart Mobility and continued last year with investments in Velodyne, Civil Maps, and Nirenberg Neuroscience and acquisitions of SAIPS and the Chariot ride-sharing service.
The Argo deal, however, may signal the end of this recent investment spree.
“I think, relative to the technical approach we’re taking, we’re pretty aligned on what we need,” Nair said. “At the same time, we’re always open to new technologies, new advancements, and new partners. This space is advancing so rapidly, there will be new innovations by 2021. But we’re also confident in terms of the resources and partners we have right now. We’re in a really good position.”
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