Economy

Ford bets $1B on Argo AI: Why Silicon Valley and Detroit are teaming up

The automaker will invest $1 billion in artificial intelligence startup Argo AI, part of its quest for fully autonomous cars.

The photo shows the Ford logo on display at the Pittsburgh International Auto Show in February 2016. Ford Motor will invest $1 billion on a robotics startup, Argo AI.
Gene J. Puskar/AP/File
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In the race to make self-driving cars an everyday reality, Ford may have just pulled into the lead.

The automaker will invest $1 billion in artificial intelligence startup Argo AI, Ford announced Friday. "The next decade will be defined by the automation of the automobile," said Ford president and chief executive officer Mark Fields, "and autonomous vehicles will have as significant an impact on society as Ford's moving assembly line did 100 years ago."

The investment, which will be used to develop a virtual driver system for Ford’s autonomous vehicle – due to hit the assembly line in 2021 – makes the Dearborn-based manufacturer the majority stakeholder in Argo AI, which was started last fall by former Google self-driving car project director Bryan Salesky and Uber engineering lead Peter Rander.

Argo was looking to extend "the incredible advancements in machine learning, artificial intelligence and computer vision” to the general public, said Mr. Salesky, and Ford is the perfect partner to do that.

“We are energized by Ford’s commitment and vision for the future of mobility, and we believe this partnership will enable self-driving cars to be commercialized and deployed at scale to extend affordable mobility to all,” Salesky said in a statement.

As competitors, including Uber, Tesla, and Aurora, snatch up top robotics talent, Ford’s five-year investment will help both companies attract and retain top engineers and software developers in this increasingly competitive battleground.

Argo, which is headquartered in Pittsburgh but has offices in both Michigan and California, hopes to expand its team to have more than 200 employees by the end of the year.

The announcement came as a growing number of traditional auto industry giants join forces with tech companies. In March, General Motors acquired Cruise Automation – a startup developing self-driving technology – for more than $1 billion, after investing $500 million in Lyft at the beginning of the year. Toyota and Volkswagon followed suit, investing in Uber and Israel-based Gett, respectively.

Ford's rapidly expanding business model has expanded into several emerging fields in recent years, including ride sharing and bicycle rentals. In its partnership with Argo AI, the century-old automaker said it hopes to further transform itself into a broad-based mobility company.

"Working together with Argo AI gives Ford a distinct competitive advantage at the intersection of the automotive and technology industries," said Raj Nair, Ford's executive vice president. "This open collaboration is unlike any other partnership – allowing us to benefit from combining the speed of a startup with Ford’s strengths in scaling technology, systems integration, and vehicle design.”