Bad times for autonomous driving in the United States. After Waymo (Google) and Cruise (GM), whose stock market valuations have fallen, it’s Argo AI’s turn to be in turmoil.
This start-up, founded at the end of 2016 by Bryan Salesky and Peter Rander, engineers by training having worked at Google (Waymo) for one and Uber for the second, is specialized in artificial intelligence and robotics. It had achieved a bang in February 2017 by welcoming the manufacturer Ford, which had become its main financial backer thanks to an investment of 1 billion dollars over five years. The mission was to develop a software platform to transform the models of the blue oval brand into autonomous cars (level 4) by 2021.
Meanwhile, another automaker, Volkswagen, has also taken an interest in Argo AI’s work following its divorce from Aurora Innovation, a start-up partly funded by Amazon developing solutions for self-driving cars. Ford and Volkswagen have entered into a partnership resulting in an equally owned joint venture, with startup Argo AI serving as the foundation. The investment was then estimated at 4 billion dollars. The agreement provided for Volkswagen to supply Ford with its MEB platform dedicated to electric vehicles against technical know-how in autonomous driving via the start-up Argo AI in which Ford was a majority shareholder.
A loss of 2.7 billion dollars that does not pass
But now, that’s ancient history. During the proclamation of its financial results for the third quarter of 2022 (a turnover up to 39.4 billion dollars and a profit of 1.6 million dollars), Ford announced the closure of Argo HAVE. The reason ? A net loss of $827 million due to a $2.7 billion loss on its Argo AI investment.
Ford would also blame the start-up for its inability to attract new investors and deliver a production autonomous vehicle on time. But the real reason would rather be a redirection of resources towards the development of driving aids rather than autonomous vehicle systems.
According to Jim Farley, the company’s CEO, “it is essential for Ford to develop formidable and differentiated L2+ and L3 applications which, at the same time, make transport even safer“. As for level 4 driving aids, Jim Farley also insinuated that “Ford would be able to buy AV technologies eventually, instead of developing them in-house”. Before adding:Ford is optimistic about the future of ADAS L4, but cost-effective, fully autonomous vehicles at scale are still a long way off and we won’t necessarily have to create this technology ourselves.“.
As for Volkswagen, the German manufacturer has declared its intention “to redirect its resources and no longer invest in Argo AI“. The German said he wanted use its Cariad software unit to advance the development of highly automated and autonomous driving with Bosch and, in the future, in China with Horizon Robotics“. When we know the problems encountered by Cariad to even develop the remote update function on the brand’s electric vehicles, the task promises to be difficult…
Despite its 2.5% stake, Lyft, a competitor of Uber in the United States, was counting on Argo AI’s self-driving technology to put at least 1,000 self-driving vehicles on the road, over the next five years, in the future. within its carpooling network across the United States. The first cities chosen were Miami and Austin. Following the announcement of the closure, Lyft issued a statement in which it thanks Argo AI “for being an excellent partner” and note that “this development has no impact on the company’s standalone strategy“Recall that in May 2018, Lyft was one of the first to integrate into its fleet around thirty autonomous BMW 5 Series, prepared by the equipment manufacturer Aptiv, representing one of the branches resulting from the split of Delphi.
According to the website Techcrunch which exposed the case, Argo AI employees were warned that some of them would be taken over by Ford and Volkswagen. All employees, without exception, should receive different bonuses including, among other things, health insurance.
In a press release, the two founders of Argo AI, Bryan Salesky and Peter Rander, said to themselves “incredibly grateful for the dedication of the Argo AI team, and so proud of (our) joint accomplishments“. The latter added that they expected “(…) to see success for everyone in everything that comes next, including the opportunities presented by Ford and VW to continue their work on automated driving technology“.
Where is Argo Drive? Miami, Austin, Pittsburgh, Palo Alto, Detroit, Hamburg & Munich. Earlier this year, we began driverless operations in Miami & Austin, during daytime hours, in areas of the city where we encounter vehicle, pedestrian, bicyclist & scooter traffic. pic.twitter.com/foEI7EdtEa
— Argo AI (@argoai) October 20, 2022
Still, the adventure of Argo AI will leave a taste of unfinished business. Indeed, the start-up employing more than 2,000 people was quite well launched with trials – on open roads in Austin, Detroit, Miami, Palo Alto and Pittsburgh – of integrated autonomous driving on Ford models (Fusion and Escape). Added to this were collaborations with Lyft, Walmart, and 412 Food Rescue. In Europe, it is the famous Volkswagen ID. Buzz which served as a laboratory in Munich and Hamburg.