Ford shuts down VW-backed Argo AI • TechCrunch

Argo AI, an autonomous vehicle startup that debuted on the scene in 2017 with a $1 billion investment, is shutting down – its parts being absorbed by its two main backers, Ford and VW, according to people familiar with the matter.

At a public meeting on Wednesday, Argo AI employees were told that some people would be getting offers from the two automakers, according to multiple sources, who asked not to be named. It was unclear how many people would be hired at Ford or VW and which companies would buy Argo’s technology.

Employees were told they would receive a severance package that included insurance and two separate bonuses – an annual reward plus a trading bonus following the deal with Ford and VW. All Argo employees will receive these. For those who do not stay at Ford or VW, they will receive additional severance and severance pay, including health insurance. Several people told TechCrunch that it’s a generous package, and the company’s founders spoke directly to its more than 2,000 employees.

“In coordination with our shareholders, it has been decided that Argo AI will not continue its mission as a company. Argo said in a statement, most employees will have the opportunity to continue working on automated driving technology with Ford or Volkswagen, while others will sadly end their employment.” Said.

Ford said in its third-quarter earnings report released Wednesday that it made a strategic decision to shift its resources to developing advanced driver assistance systems, not autonomous vehicle technology that could be applied to robotaxes. The company said it recorded a non-cash pre-tax impairment of $2.7 billion on its investment in Argo AI, resulting in a net loss of $827 million for the third quarter.

This decision seems to have resulted from Argo’s inability to attract new investors. Ford CEO Jim Farley acknowledged that the company expects to bring its autonomous vehicle technology to market widely by 2021.

“Things have changed, however, and there is now a great opportunity for Ford to give time, the most precious commodity of modern life, back to millions of customers while they are in their vehicles,” Farley said. “It’s critical for Ford to develop great and differentiated L2+ and L3 applications that also make transportation safer.”

Farley also hinted that Ford might purchase AV technology rather than develop it in-house. “We are optimistic about a future for L4 ADAS, but profitable, fully autonomous vehicles on a large scale are far away and we will not need to create this technology ourselves,” he added.

Ford also stated that “development and customer enthusiasm for the benefits of L2+ and L3 ADAS are guaranteed to increase the company’s short-term aspirations and commitment in these areas.”

Argo was founded in 2016 by Bryan Salesky and Pete Rander. The company came out of secrecy in February 2017 when Ford announced it would invest $1 billion in Argo over five years. Since then, the company has raised more than $2.6 billion, primarily from Ford and VW, to develop, test and ultimately commercialize the automated driving system.

The initial Ford investment came at a particularly exciting time for the emerging autonomous vehicle industry. Startups, many of which were founded by early pioneers of Google’s self-driving project, were making dazzling venture capital deals. A series of acquisitions followed: GM bought Cruise in 2016 for $1 billion; Delphi, now Aptiv, bought nuTonomy for $450 million; and Amazon bought Zoox.

Promises to commercialize AV technology have proven harder than expected. A wave of consolidation swept the industry as companies were exponentially swallowed up by other companies, including Apple. Others have turned to the public market, either through a traditional IPO like TuSimple or by merging with a special purpose buyout company like Aurora in hopes of raising the capital it needs to continue its mission.

Slang seemed to be gaining ground last year. The company’s self-driving Ford Fusion vehicles, and now Ford Escape Hybrids, have been tested on public roads in Austin, Detroit, Miami, Palo Alto and Pittsburgh, where it is headquartered. In the EU, Argo used the all-electric Volkswagen ID. Buzz for test programs in Hamburg and Munich. Argo also has several pilot programs running in Austin, Miami, and Pittsburgh with Lyft, Walmart, and 412 Food Rescue.

Just last month, the company unveiled an ecosystem of products and services designed to support its commercial delivery and robotaxis operations. The products – a list that includes fleet management software, data analytics, high-definition mapping and cloud-based communication tools – extend far beyond the self-driving system that allows a vehicle to navigate city streets without a human driver behind the wheel. Argo seemed to be telling the world it was open for business.

“We are incredibly grateful for the dedication of the Argo AI team and proud of the achievements we have achieved together,” Salesky and Rander said in a statement. Said. “The team has consistently gone above and beyond, and we expect to see success for everyone no matter what happens next, including the opportunities offered by Ford and VW to continue their work on automated driving technology.”

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