By on February 10, 2017

ford Argo AI

Ford Motor Company intends to invest $1 billion into tech startup Argo AI over the next five years, giving the Blue Oval a majority stake in the company as it continues to reach for the goal of producing a fully autonomous vehicle by 2021.

The Pittsburgh-based Argo will help the Detroit automaker develop a “virtual driver system” for its proposed commercial ride-sharing fleets before moving on to retail vehicles. Ford even went so far as to suggest that the software it develops with Argo could be licensed to other companies.

While still officially an automaker, the Blue Oval really is going all in on its new identity as a mobility company and it isn’t afraid to remind everyone of all of the important work it feels that it is doing.

“The next decade will be defined by the automation of the automobile, and autonomous vehicles will have as significant an impact on society as Ford’s moving assembly line did 100 years ago,” Ford CEO Mark Fields said in Friday’s official statement. “We believe that investing in Argo AI will create significant value for our shareholders by strengthening Ford’s leadership in bringing self-driving vehicles to market in the near term and by creating technology that could be licensed to others in the future.”

Argo was founded by Bryan Salesky, previously with Google, and Peter Rander, formerly of Uber. Ford says that the startup will have offices in southeastern Michigan, California, and Pittsburgh before the end of the year. It will also employ an additional 200 workers between those locations.

Last year, Ford developed a Smart Mobility subsidiary to invest in and help develop emerging mobility opportunities as it branches away from the traditional role of an automotive manufacturer. Since then, the company has increased its involvement in mobility experiments and commitment to connectivity tech, autonomous vehicles, consumer analytics, ride-sharing, and passenger vehicle alternatives — like bicycles or Ford’s bizarre Carr-E mobility disk.

[Image: Ford Motor Co]

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23 Comments on “The Mobility Company Known as Ford is Investing $1 Billion Into an Artificial Intelligence Startup...”


  • avatar
    VoGo

    Those are some Carnegie Mellon boys cleaning up there. Good for them.

    • 0 avatar
      SCE to AUX

      Yes, first they jumped from CMU to Uber, now they’re in the Argo AI thing. Next, I’d expect them to hire their friends away from Uber, likely leaving two Pittsburgh-based robotics teams decimated in the last few years.

      That’s the nature of high-tech. In the small Pittsburgh market (where I live), you’re only a couple degrees from every other engineer in the city – we all seem to rotate through the same 10-20 companies.

      However, I wonder what strings the $1 billion has with it. These guys may be slaves to Ford for the next several years.

      • 0 avatar
        orenwolf

        “However, I wonder what strings the $1 billion has with it. These guys may be slaves to Ford for the next several years.”

        It could be the opposite too: “here, we’re gonna give you a scrrge mcduck level of investment, so you can truly do blue-sky engineering on this thing”

  • avatar
    orenwolf

    This is the sort of thing I point at when people go on and on about how fully autonomous vehicles are decades away, or could never happen due to liability issues, or need to be perfect before they are deployed.

    The change will be incremental (like it is now with autosteer/autothrottle). Liability issues will be resolved as part of that incremental process (as they are being now). And literally billions of dollars are being spent making the technology first work in well-lined predictable streets, then moving on from there.

    The elderly and mobility-impaired have something to look forward to, and with any luck, we’ll soon not point to auto collisions as a leading cause of death.

    • 0 avatar
      SCE to AUX

      How are the liability issues being cleaned up?

      I just don’t see car mfrs ever writing uncontested checks to bereaved plaintiffs. Payouts are always contested, and that involves assigning blame.

      So then how will mfrs avoid blame – by assigning all liability to the driver (as is possible with Level 2 AVs)? If this happens, won’t legal wrangling limit deployment of Level 4 and Level 5 AVs to near zero, since buyers won’t want to be responsible for the faults of a system that is supposed to be perfect?

      And the issue won’t involve only deaths. What about when a deer runs into the side of my AV (which happens in PA a lot) – shouldn’t the vehicle have detected the risk and avoided the collision?

      I ask these questions seriously, because the autonomous utopia of the future seems at odds with a litigious society.

      • 0 avatar
        orenwolf

        That’s my point. Do you honestly believe corporations like Ford are sinking billions into R&D for full AV but have somehow forgotten about the liability issue? You don’t think that would have been one of the first things in house counsel would have brought up when going down this path?

        My argument is the mfrs. would not be going down this path without a feasible liability plan.

        • 0 avatar
          SCE to AUX

          Well, I wonder about that.

          Lots of companies make expensive bad decisions, and I’d present the fuel cell efforts by Toyota, Honda, and Hyundai as Exhibit A.

          Exhibit B could be Segway, whose products never approached their stratospheric sales predictions partly because of liability issues – some cities wanted to treat the Segway as a vehicle and therefore prevented them from sidewalk use. Safety concerns meant that commercial use of them requires a helmet, adding to the ‘dork’ factor for something that goes 12 mph tops.

          • 0 avatar
            orenwolf

            Sure, but this isn’t one company or one region.

            I agree, though, it’s quite possible that the rest of the world will get Autonomous vehicles while the US does not. Especially since I think we’re heading towards a further bifurcation of US vs international vehicle models anyway.

            As it is, Mazda and other manufactures have until recently left things like start-stop and regen technologies off of their US offerings. I’m not sure why, possibly low uptake, but also possibly liability issues. I’m not sure.

            I guess I should rephrase and say that I’m sure most of the world will solve the liability issues incrementally, given research taking place all over Asia, in Germany, and elsewhere (and wanting to support their domestic endeavours). It’s quite possible that the US will be left behind in that sense.

          • 0 avatar
            JimZ

            I’d hardly say fuel cell research is a “bad idea,” especially if you approach them as what they are- EVs with a rapidly “refillable” battery.

            Now, *producing* FCVs may have been a bad idea; the FCX Clarity and Mirai seem to be little more than vanity plays.

            “As it is, Mazda and other manufactures have until recently left things like start-stop and regen technologies off of their US offerings. I’m not sure why,”

            Mazda is just an odd duck. I have an issue of Engine Testing International where one of their higher-ups brags that they want to be the “first to HCCI and the last to electrification.” They’ve kept trying and trying to make the SkyActiv diesel meet EPA standards without SCR, and no luck there. They’ve been working on an auto stop/start system which doesn’t use the starter motor; instead trying to stop the engine at a precise time with one cylinder just after top dead center after the compression stroke, then firing that cylinder to restart the engine. No idea what their solution is for leak-down. And of course, their long history of wasting money and resources on the Wankel.

          • 0 avatar
            mcs

            @jimz: Nissan’s ethanol fueled solid oxide fuel cell is an interesting idea. It gets around the infrastructure issues and might end up being offered as a range extender for the next Leaf.

            http://nissannews.com/en-US/nissan/usa/channels/us-united-states-nissan/releases/nissan-unveils-world-s-first-solid-oxide-fuel-cell-vehicle

    • 0 avatar
      SCE to AUX

      Here is one lawyer’s view on this subject, which happens to match mine:

      http://www.roadandtrack.com/car-culture/a32235/autonomous-car-crash-lawsuits/

      • 0 avatar
        orenwolf

        Well, I guess we’ll see. I agree that the US may be last to the game, here, while the rest of the world enjoys the benefits. I hope not though, it would be sad to see a technology chiefly developed in the US not find usefulness there.

  • avatar
    OldManPants

    Eyes on the Prize; get meat appendages away from the wheel and pedals.

  • avatar
    zip94513

    One billion down the drain. A stock buyback would have been smarter.

    • 0 avatar
      gmichaelj

      zip94513

      Wrong – Wrong – Wrong. That kind of thinking is what accountants are for. If we are going to progress we need innovation, which entails real risk taking. Otherwise these car companies risk being overtaken by technology.

      I can’t say that I understand what Ford bought in this case (b/c even if read the press release or SEC filing for it, the discussion would be either over my head or purposely obfuscated by management), but I’m sure they did some (hopefully a lot) of homework before they shelled out $1 Billion. Also, I doubt it was “Here’s a billion, let us know how it works out” – there’s going to be some benchmarks/milestones for releases of the funds.

      • 0 avatar
        zip94513

        Wrong. Some of you will always think it’s about the short term money. What did Ford buy? Absolutely nothing but an idea. They’re getting zero return on this investment until the software finds itself in Ford vehicles. Instead, Ford keeps putting itself deeper in debt, because $175 billion on the books just wasn’t enough. The billion, if it was to be spent at all, should have been spent making more reliable & higher quality vehicles. So unless you own a Ford or Ford stock, and I own both, you’re not seeing the dollars go down the drain the same way I do.

        Last but not least, none of you are going to be buying autonomous vehicles, so don’t kid yourself.

        • 0 avatar
          gmichaelj

          zip94513

          First let me say that 3 Wrongs were too much – I am thinking of not only Ford, but of the economy overall where investors seemed to have become overly cautious. This hurts the economy and I think is the One of the reasons for the slow growth we’ve seen for the last 17 years

          Second, I don’t think its about short term money, I was trying to make the point for long term investment.

          Third, I’ll take your word for the debt level – I don’t want to go look it up. But I don’t think Ford is over-levered, as I recall much of Ford’s borrowing is to invest in car loans and leases (banking), which could be both be carved out of the balance sheet, from an analyst’s perspective, if you wanted to just look at ops.

          Forth, I can’t comment on how much an additional billion would add to Ford’s quality and how much that would increase the company’s market value. But I don’t think I have to own the stock to comment on your criticism of the Company’s investment strategy.

          Finally, if you are not happy with Ford’s investment strategy then I’m not sure you did yourself a favor investing with them – I seem to recall that Bill Ford has been talking about becoming a mobility-type company for quite a while.

          PS. I would love to buy a vehicle I could let drive me from Atl to LA while I sleep (30 hrs total trip time) and could skip the 5 hour flight in the sardine can.

        • 0 avatar
          JimZ

          Ford’s AUTOMOTIVE debt is only about $12 bn. People keep bringing up that $100bn+ number without understanding that it includes Ford Motor CREDIT Co. (FMCC.)

          http://www.fool.com/investing/general/2016/03/11/why-ford-motor-companys-debt-often-misunderstood.aspx

          FMCC’s debt comes from borrowing money to lend to consumers, as well as dealerships for floorplan.

          • 0 avatar
            zip94513

            I’ll add that next to no one but folks already purchasing Ford’s are going to possibly buy Ford’s version of an autonomous vehicle. Ford needs to build up customer loyalty like Toyota, who can make anything and sell it. I also own a Toyota, and they’re extremely reliable. I fail to see how Ford will recoup this investment. Ford would have been better off buying in with Tesla’s software instead of investing in a 2021 vision.

          • 0 avatar
            JimZ

            then why the f**k aren’t you sitting at Mark Fields’s desk?

    • 0 avatar
      JimZ

      This right here- the short term, quarter-by-quarter “show me the money” attitude of stockholders is what sinks public companies. Sometimes execs just need to follow Tim Cook’s example and say “this is the right thing for us to do, if you don’t like it, divest and go away.”

  • avatar

    Still… the biggest strides towards implementing self-driving can be made by the automaker itself. Why would you want a big, cumbersome self-driving car that will get you stuck in traffic, if the average ride consists of one-and-a-half person? Robotics should challenge to reinvent the car, instead of prolong shelf life of the sort of car we already know. Here’s an idea… http://evworld.com/blogs.cfm?blogid=1399


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