Ford's Future Focus: How Argo Ai Investment Accelerates Global Ambitions

Ford Motor Company's new investments in Argo AI will aid its global expansion and help it to develop its autonomous vehicle technology. Argo AI is an artificial intelligence company, founded in 2016 by Bryan Salesky and Peter Rander, veterans of the Google and Uber automated driving programs. In 2017, Ford announced it would invest $1 billion over five years in Argo AI to develop a virtual driver system for its autonomous vehicles. This initial investment gave Ford a majority stake in Argo AI, with the remaining equity belonging to Argo's founders and employees. In 2020, Volkswagen also invested in Argo AI, giving both Ford and Volkswagen equal, minority stakes in the company. This partnership will help Ford and Volkswagen to share the costs of developing Argo AI's self-driving vehicle technology and expand their global reach.

Argo AI's $7.5 billion valuation

Argo AI, an autonomous vehicle technology startup, has been valued at $7.5 billion, just over three years after receiving an initial investment of $1 billion from Ford Motor Company. This official valuation was confirmed in 2020, two months after the VW Group finalised its $2.6 billion investment in Argo AI.

The company was co-founded in 2016 by Bryan Salesky and Peter Rander, former leaders of the self-driving car teams of Google and Uber, respectively. Salesky and Rander were known in the tight-knit autonomous vehicle industry, having previously worked together at the National Robotics Engineering Center.

Argo AI focused on developing the virtual driver system, including sensors, software, and high-definition maps, for Ford's self-driving vehicles. This mission now extends to VW Group as well, with Ford and VW sharing the costs of developing Argo AI's self-driving vehicle technology.

The investment by VW expanded Argo AI's workforce to over 1,000 people and enabled the company to establish its European headquarters in Munich. The partnership between Ford and VW gave Argo AI a combined majority control, with each automaker holding equal, minority stakes.

Despite the challenges posed by the COVID-19 pandemic, Ford remained committed to the long-term pursuit of autonomous vehicles. The investment in Argo AI provided a timely gain, contributing to Ford's second-quarter profit of $1.1 billion.

Overall, the collaboration between Argo AI, Ford, and VW showcases the benefits of combining the agility of a technology startup with the experience and resources of established automakers in the race to make autonomous driving a reality.

Argo AI's disbandment

Argo AI, a startup company working on autonomous driving technology, is shutting down. Its parts and employees will be absorbed by its backers, Ford and Volkswagen (VW). The decision to disband Argo AI was made after the company failed to secure further investment from Amazon. Ford and VW will no longer invest in Argo AI and will instead shift their resources to other ventures.

Argo AI was founded in 2016 by Bryan Salesky and Peter Rander, veterans of the Google and Uber automated driving programs. The company burst onto the scene in 2017 with a $1 billion investment from Ford, which acquired a majority stake in the company. In 2020, VW also invested $2.6 billion in Argo AI, giving the two automakers equal, minority stakes in the company.

Argo AI focused on developing a virtual driver system, including sensors, software, and high-definition maps, for Ford and VW's self-driving vehicles. The company had a presence in the US and Europe, with offices in Pittsburgh, Detroit, Palo Alto, Cranbury, Munich, and other cities. It had a workforce of over 1,000 employees and was valued at $7.5 billion in 2020.

Despite its progress and expansion, Argo AI faced challenges in commercializing its autonomous vehicle technology. The company posted an $827 million net loss in the third quarter of 2022, and its backers decided to disband the company and integrate its resources into their own autonomous vehicle efforts.

Ford and VW's decision to disband Argo AI and shift their focus away from fully autonomous vehicles reflects the challenges and long-term nature of developing and deploying this technology. Ford CEO Jim Farley acknowledged that bringing autonomous vehicles to market is a long way off and that the company may choose to buy AV tech in the future instead of developing it in-house.

The future of Ford's self-driving vehicles

Ford Motor Company has been at the forefront of the self-driving vehicle race, investing heavily in Argo AI, a startup founded in 2016 by Bryan Salesky and Peter Rander, veterans of the Google and Uber automated driving programs. Argo AI's initial focus was to support Ford's autonomous vehicle development and production, with a $1 billion investment from Ford over five years. The collaboration aimed to develop a virtual driver system for Ford's self-driving vehicles, combining Argo AI's robotics experience and artificial intelligence software with Ford's automotive expertise.

In 2020, Volkswagen joined the partnership with a $2.6 billion investment in Argo AI, bringing its autonomous vehicle technology expertise to the table. This expansion provided Argo AI with a foothold in Europe and increased its workforce to over 1,000 employees. The collaboration between Ford, Volkswagen, and Argo AI aimed to introduce autonomous vehicle technology in the US and Europe, with both automakers sharing the costs of developing Argo AI's self-driving technology.

Despite the initial success and promising developments, Argo AI faced challenges in commercializing its technology. In October 2022, Ford announced that Argo AI would be disbanded, and its employees and technology would be absorbed by Ford and Volkswagen. This decision was fueled by Argo AI's inability to attract new investors and a shift in Ford's strategy to focus on advanced driver assistance systems instead of autonomous vehicle technology for robotaxis.

While Ford has stepped back from its initial plans for fully autonomous vehicles, it remains committed to the development of advanced driver assistance systems and has expressed optimism about the future of Level 4 ADAS. Ford's CEO, Jim Farley, hinted at the possibility of purchasing AV technology in the future instead of developing it in-house.

Looking forward, Ford's self-driving vehicle ambitions may take on a different form. By leveraging the talent and technology acquired from Argo AI, Ford can continue to develop and improve its advanced driver assistance systems. Additionally, Ford has the option to license Argo AI's technology to other companies, creating a potential revenue stream and contributing to the advancement of self-driving vehicles in the industry. While fully autonomous vehicles may still be on the horizon, Ford is adapting its strategy to focus on near-term opportunities and creating value for its shareholders.

Volkswagen's investment in Argo AI

In 2019, Volkswagen invested $2.6 billion in Argo AI, a Pittsburgh-based autonomous vehicle startup. The deal included $1 billion in cash and Argo taking control of VW's European self-driving unit, valued at $1.6 billion, along with its 200+ employees. This partnership was part of a broader alliance between Volkswagen and Ford Motor Company, which had acquired a majority stake in Argo AI in 2017.

The investment gave Argo AI a well-capitalized position and made it the only self-driving technology platform with partnerships and commercial agreements for deployment across the US and Europe. Volkswagen's statement at the time said that the company was working with Argo AI to enable further working opportunities for employees and continue developing promising projects on autonomous driving.

However, in October 2022, it was announced that Argo AI would be shutting down, with some employees moving to Ford and Volkswagen. This decision was made due to the growing realization that profitable, fully autonomous vehicles at scale were still a long way off, and the challenge of creating commercially viable autonomous vehicles proved more complex than anticipated. Volkswagen also indicated plans to shift resources and focus on other partnerships for developing automated and self-driving technology, such as with Bosch and Horizon Robotics in China.

Argo AI's expansion to Europe

The expansion to Europe was a significant move for Argo AI, as it positioned the company as a technology platform with a global footprint. With Volkswagen's strength in Europe and other global markets, the partnership aimed to solve the mobility challenges faced by many cities worldwide. As one of the world's largest automakers, Volkswagen also brought significant experience with electric vehicles to the partnership, allowing for the potential deployment of zero-emissions self-driving vehicles in cities.

The addition of the AID team to Argo AI's existing structure provided a unique combination of the agility of a technology startup with the scale and capability of a global automaker. This partnership allowed Argo AI to establish relationships with two global automakers, Ford and Volkswagen, enabling the company to work hand-in-hand on the design, development, and manufacture of self-driving vehicles.

The expansion to Europe also meant that Argo AI became the first self-driving company with definitive deployment plans in both the United States and Europe, further solidifying its position as a leader in the industry. With the backing of Ford and Volkswagen, Argo technology could reach nearly every global market and be applied across multiple brands and vehicle platforms.

The European expansion provided Argo AI with additional resources and expertise, strengthening its position in the autonomous driving technology space and bringing it a step closer to its mission of making transportation safer, more accessible, affordable, and convenient through the development of self-driving vehicles.

Frequently asked questions