Autonomous vehicle startup Argo AI closing in wake of Ford losses
Autonomous vehicle company Argo AI is shutting down. In an earnings report, Ford (a major investor in Argo AI) noted that the company is being wound down and that it will hire engineers from the startup to expand and speed up development of Level 2+ and Level 3 autonomous driving systems.
Ford says that it made a decision to refocus its self-driving capital spending from the Level 4 systems Argo was working on (where the vehicles handles most driving operations) to Level 2+ (advanced driver assistance) and Level 3 (conditional automation) tech it’s developing in-house. It noted that Argo AI wasn’t able to attract new investors and that it was taking a “$2.7 billion non-cash, pretax impairment on its investment” in the company, which led to it posting an $827 million net loss for Q3.
According to TechCrunch, which first reported on Argo AI’s closure, Volkswagen and Ford will snap up the company’s tech and other assets. It’s not clear how the automakers, which invested at least $3.6 billion into Argo AI between them, are divvying things up nor how many of Argo AI’s more than 2,000 workers they plan to make employment offers to. All Argo AI employees will receive bonuses as part of their severance package, with those who Ford and VW don’t keep on receiving additional payments and health insurance, according to the report.
“In coordination with our shareholders, the decision has been made that Argo AI will not continue on its mission as a company,” an Argo AI spokesperson told Engadget in a statement. “Many of the employees will receive an opportunity to continue work on automated driving technology with either Ford or Volkswagen, while employment for others will unfortunately come to an end.”
“We are incredibly grateful for the dedication of the Argo AI team, and so proud of our achievements together,” Argo AI co-founders CEO Bryan Salesky and president Dr. Peter Rander said. “The team consistently delivered above and beyond, and we expect to see success for everyone in whatever comes next, including the opportunities presented by Ford and VW to continue their work on automated driving technology.”
In 2017, Ford said it would invest $1 billion into Argo AI over five years. Two years later, VW committed $2.6 billion in capital and assets toward the startup. Around that time, Ford and VW said they would work on vehicles that harness Argo AI’s autonomous driving tech. Between them, the automakers held a “substantial majority” stake in Argo AI.
Argo AI had been testing its tech on public roads in the US and Germany. In May, it commenced driverless operations in Austin and Miami without a safety driver at the wheel. Lyft was among the companies that were looking at deploying Argo AI-powered vehicles. Just last month, Argo AI announced a number of tools and services designed to support autonomous delivery and robotaxi operations.
Creating a robust and safe self-driving system is not exactly an easy challenge. Full Level 5 autonomy is still at least several years away from becoming truly viable for the mass market. To that end, Ford said in its earnings report that “the auto industry’s large-scale profitable commercialization of Level 4 advanced driver assistance systems will be further out than originally anticipated.”
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