Argo AI to cease operations as Ford and Volkswagen make investments
The self-driving world took a big hit on Wednesday with the sudden news Argo AI will shut down. The high-profile startup had deep pockets thanks to big investments from Ford and then the Volkswagen Group, but both automakers are pulling back those resources to apply them to other problems, such as advanced driver assistance systems.
Argo was founded in 2016 and went public with the news the following year Ford was investing one billion dollars in the startup over five years. At the time, the automaker had planned to launch a commercial self-driving car in 2021, a date it obviously missed and an ambition it no longer fulfills.
In 2019, the VW Group joined the party, adding another billion in cash and $1.6 billion in the form of Audi’s self-driving spinoff. The company also agreed to buy half of Ford’s stake over three years.
What makes the news surprising is that Argo ranks among autonomous vehicle startups alongside Alphabet’s Waymo and General Motors-backed Cruise. in 2021, Lyft partnered with Argo After selling its own self-driving research group to Toyota and expanding Argo-powered self-driving Lyft in Miami (starting in December 2021) and Austin (At the end of September 2022).
In September 2021, Walmart, another Argo partner, also announced plans to begin using the startup’s self-driving technology for last-mile deliveries in Austin, Texas; Miami; and Washington, DC. Argo also started autonomous deliveries for a food insecure organization in Pittsburgh in 2022.
But apparently none of those business models made sense, and without additional backers, Ford and VW are pulling out.
In its Q3 report to investors, also released Wednesday, Ford said he had it “Argo AI made a strategic decision to shift its capital expenditure from developing advanced driver assistance systems to in-house developed L2+/L3 technology. Earlier, Argo AI was unable to attract new investors. Accordingly, Ford has raised $2.7 billion did not record them. – Cash, pre-tax impairment due to investment in Argo AI, net loss of $827 million in the quarter.”
Instead, the company will continue to develop partially automated systems like BlueCruise Ars managing editor Eric Bangeman has spent quite a few hours testing.
“[T]Things have changed, and Ford has a tremendous opportunity to give millions of customers time, the most valuable commodity in modern life, while they’re in their vehicles,” said Jim Farley, Ford president and CEO.
“It is critical for Ford to develop excellent and separate L2+ and L3 applications that, in turn, make transportation even safer. We are optimistic about the future of L4 ADAS, but cost-effective, fully autonomous vehicles at scale are a long way off, and we don’t have to create this technology ourselves. will have to,” said Farley.
The VW Group has not abandoned its own robotaxi ambitions…Moia still plans to roll out standalone ID. Buzzes in Hamburg, Germany, in 2025 But the company is strengthening partnerships to develop autonomous driving.
VW Group’s software division LOVE will be responsible for developing partially automated driver aids (like BlueCruise) as well as fully autonomous driving technology with Bosch and eventually Horizon Robotics in China. Meanwhile, VW Commercial Vehicles will continue to try to make sense of the driverless “mobility as a service” economy.
“Especially in the development of future technologies, attention and speed count. Our goal is to offer our customers the most powerful functions as soon as possible and to implement our development as cost-effectively as possible,” said VW Group CEO Oliver Blume. .
According to TechCrunch, Argo workers were told at a meeting on Wednesday that some of them will be offered jobs at Ford or VW in addition to receiving a “generous” severance package. Argo workers who are not offered jobs at one of the automakers will receive an additional bonus, as well as health insurance.
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