Why Ford is investing in Argo AI?

Ford Motors (NYSE:F) recently announced that the company is going to invest $1 billion in the Artificial Intelligence startup Argo AI over a 5 year period.

Argo AI is a new company, founded last year by Bryan Salesky and Peter Rander. Both are alumni of Carnegie Mellon National Robotics Engineering Center. Salesky and Rander were former employees of Google’s Waymo and Uber technologies respectively.

The collaboration is to have fully autonomous, SAE level 4-capable vehicle for commercial applicability in mobility services in 2021.

“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,” said Ford President and CEO Mark Fields.

“As Ford expands to be an auto and a mobility company, 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.”

Source:Investing.com

It has to pass regulatory and political hurdles for the launch of Level 4. This is one of the reason why other car manufacturers have targeted Level 3.

General Motors (NYSE:GM) bought Cruise Automation last year to stay in the competition for driverless cars. BMW, Mercedes Benz and Volkswagen’s Audi are planning to launch semi autonomous cars which are categorized as Level 3. US Department of Transportation last year adopted SAE Internationals six level of automation for on road motors vehicles.

Another advantage is that it would contribute to Ford’s Smart Mobility LLC which has the aim of commercialization strategy for Ford’s self driving vehicles. Company is testing to use autonomous vehicles to move goods and people, ride sharing or package delivery fleets.

Argo AI initial purpose will be to develop Ford’s autonomous vehicle and subsequently they will try to license the self driving system to other companies. The company might even come up with an IPO for Argo AI.

Ford will have majority stakeholder in Argo AI. Argo employees will have an equity component as part of their remuneration so that they can be part of the company’s success.  Argo’s AI board will have five board members. Ford’s CTO Raj Nair, Ford Group Vice President, Global Strategy John Casesa, Bryan , Peter and one independent director.

 About Ford Motors

Ford Motors is a global automotive and mobility company based in Dearborn, Michigan. It has about 201,000 employees and 62 plants worldwide. The company’s core business includes designing, manufacturing, marketing and servicing a full line of Ford cars, trucks and SUVs, as well as Lincoln luxury vehicles.

About Argo AI

Argo AI is an artificial intelligence company, based in Pittsburgh. It was established to tackle one of the most challenging applications in computer science, robotics and artificial intelligence: self-driving vehicles. It has engineering hubs in Pittsburgh, Southeastern Michigan and the Bay Area of California. The company plans to have more than 200 employees by the end of 2017.

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