Argo AI, an autonomous car startup that exploded onto the scene in 2017 with $1 billion in funding, is shutting down – part of it going into two of its sponsors: Ford and VW, according to people who know the word said.
During an all-hands meeting on Wednesday, Argo AI officials were told that some people will receive gifts from the two pilots, according to several sources who asked not to be named. It is not known how many people will be employed at Ford or VW and the companies that will receive the Argo technology.
Employees were told they would receive a severance package that included insurance and two separate bonuses – an annual bonus and a business bonus in close deals with Ford and VW. All Argo users will receive these. For those not covered by Ford or VW, they will also receive severance and severance pay, including health insurance. Several people told TechCrunch that it was a generous package and that the company’s founders spoke directly to more than 2,000 employees.
“At the meeting of our shareholders, a decision was made that Argo AI will not continue its work as a company. Most of the employees will get the opportunity to continue with the driving technology. automatically with Ford or Volkswagen, where the work for others will come to an end,” Argo said in a statement.
Ford said in its third-quarter earnings report released on Wednesday that it made the decision to focus its resources on developing advanced driver-assistance systems, not autonomous vehicle technology that could include robotics. . The company said it recorded a $2.7 billion non-cash, pretax loss on its investment in Argo AI, resulting in a net loss of $827 million for the third quarter.
The decision seems to be Argo’s inability to attract new investors. Ford CEO Jim Farley admitted that the company hopes to be able to bring autonomous car technology to market by 2021.
“But things have changed, and there’s a huge opportunity now for Ford to give time — the most valuable commodity in modern life — back to millions of customers while they’re in their cars,” Farley said. “It is very important for Ford to develop a variety of L2+ and L3 applications that improve transportation.”
Farley also said that Ford will be able to buy AV technology off the shelf, rather than developing it in-house. “We are optimistic about the future for L4 ADAS, but practical, mass autonomous vehicles are far from us and we will not develop the technology ourselves,” he added.
Ford also said that “the development and enthusiasm of customers for the benefits of L2+ and L3 ADAS licenses indicate the company’s desire and commitment in those areas.”
Argo was founded in 2016 by Bryan Salesky and Pete Rander. The company came out of hiding in February 2017 when Ford announced that it would invest $1 billion over five years in Argo. Since then, the company has raised more than $2.6 billion, from Ford and VW, in pursuit of developing, testing and eventually commercializing its self-driving system.
Ford’s first investment comes at a particularly good time for the autonomous vehicle industry. Startups, many founded by early pioneers of Google’s ride-hailing service, are making eye-popping amounts of money. A string of acquisitions followed: GM bought Cruise for $1 billion in 2016; Delphi, now Aptiv, acquired nuTonomy for $450 million; and Amazon bought Zoox.
The promises around commercial AV technology have proven to be more difficult than expected. The merger is sweeping the industry and the company is spinning off, concentrating on other companies, including Apple. Others, turn to the public market either through a traditional IPO like TuSimple, or by merging with a private acquisition company like Aurora did in the hope of getting the capital it needs to continue serve him.
Argo seems to be gaining ground in the last year. The company’s self-driving Ford Fusion vehicles, and now Ford Escape Hybrids, are often seen testing on public roads in Austin, Detroit, Miami, Palo Alto and Pittsburgh, where company. In the EU, Argo uses the all-electric Volkswagen ID. Buzz for its experimental program in Hamburg and Munich. Argo also has several pilot programs happening in Austin, Miami and Pittsburgh with Lyft, Walmart and 412 Food Rescue.
Just last month, the company unveiled a series of products and services designed to support commercial delivery and robotaxi services. The products — a list that includes fleet management software, data analytics, high-definition segmentation and cloud communication tools — extend beyond self-driving systems that allow cars to navigate city streets. without a human driver behind the wheel. Argo seems to be telling the world it’s open for business.
Salesky and Rander said in a statement, “We are very grateful for the dedication of the Argo AI team, and are proud of what we have achieved. “This team is delivering above and beyond, and we look forward to seeing the success well for everyone in whatever comes next, including the opportunities offered by Ford and VW to continue their work on self-driving technology.”