Ford Takes Control of Self-Driving Car Startup Argo AI -- Update
February 10 2017 - 4:03PM
Dow Jones News
By Tim Higgins
SAN FRANCISCO -- Ford Motor Co. has acquired majority ownership
of an artificial-intelligence startup called Argo AI and plans to
invest $1 billion in the company, the latest move in an
auto-industry spending spree to develop self-driving car
technology.
The investment, to be made during the next five years, is part
of Ford's efforts to develop a self-driving car by 2021. Argo is
now a Ford subsidiary, but founders Bryan Salesky, a former
Alphabet Inc. executive, and Peter Rander, formerly with Uber
Technologies Inc., will keep equity in the startup, which they
founded late last year, Ford said.
"We think automation is going to define the automobile in the
next decade," Ford Chief Executive Mark Fields told reporters in
San Francisco.
Auto makers and tech companies including Alphabet, Uber and
Tesla Inc. are racing to develop autonomous technology. General
Motors Co. last yearspent $1 billion to acquire Cruise Automation
to expedite its self-driving program. And Toyota Motor Corp. has
said it would spend at least $1 billion on a Silicon Valley
research center to study autonomous driving and robotics.
Ford has signaled this is a transition year for the 113-year-old
auto maker as it invests heavily in new technologies and efforts to
move beyond making conventional cars and trucks. The company is
working to roll out a self-driving vehicle in 2021 and has said
that autonomous cars could account for 20% of U.S. vehicle sales by
the end of the next decade.
Ford last year acquired San Francisco-based Chariot, a private
shuttle service, with plans to expand the commuter service to
additional metro areas.
Mr. Salesky, Argo's chief executive, declined to say how many
employees his company has currently but said he aims to hire 200 by
year's end. According to his LinkedIn biography, Mr. Salesky left
Alphabet last year where he was Google's director of hardware
development for self-driving cars. Mr. Rander, according to his
LinkedIn bio, was an engineering lead for Uber, helping launch the
tech company's first-generation of self-driving prototypes.
The deal was structured in a way that aims to keep Argo as a
nimble startup while also allowing for the technology to be
integrated into vehicle development. The company's board is made up
of Mr. Salesky and Rander, two Ford executives and one independent
director.
While Ford will get exclusive access to what is developed, the
company said Argo could ultimately license the technology to other
auto makers.
The deal's unique structure underscores the challenges companies
such as Ford have faced with attracting the necessary talent to
develop AI systems.
"There is a dearth of talent at a certain level -- these are
very sought-after people," said Chris Jones, chief analyst for
Canalys. "It will really help them recruit the talent."
Write to Tim Higgins at Tim.Higgins@WSJ.com
(END) Dow Jones Newswires
February 10, 2017 15:48 ET (20:48 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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