Ford invests $1B into Argo AI for virtual driver system

Melissa Burden
The Detroit News

Ford Motor Co. said Friday it will invest $1 billion over five years into recently formed artificial intelligence company Argo AI to develop the brains for Ford’s self-driving cars. The move bolsters the automaker’s ambitious goal of having fully autonomous cars in the road within five years.

Argo AI was founded by former executives from the self-driving car teams at Google and Uber. Ford becomes majority shareholder of Argo and the startup will act as a subsidiary of the automaker.

The effort will include roboticists and engineers to develop a software platform for the fully self-driving car that Ford is planning for 2021. The virtual-driver system is the machine-learning software — essentially the brains — of self-driving cars. Ford said the system could be licensed to other companies.

Ford has said its self-driving car will operate without a steering wheel, brake pedal or accelerator pedal. The vehicle will be rolled out first for ride-sharing or ride-hailing purposes. The company has said it wants to sell 100,000 or more a year.

“To date, Ford has been literally farther behind in the race to develop automated cars,” said Raj Rajkumar, professor of electrical and computer engineering at Carnegie Mellon University, and an autonomous driving expert who knows one of Argo’s co-founders. “They may have felt they needed to bring in more firepower to catch up. This is their big move.”

Ford’s executive vice president of global product development and chief technical officer, Raj Nair, said the tie-up will help the automaker meet its 2021 target.

“We have a very good team, but this ability to put that into a startup team environment, put it under the leadership of two pioneers in the autonomous vehicle technology field, (and) have the compensation package that will attract incremental talent, I think all of that is a win-win-win situation,” Nair said.

Automakers increasingly are partnering with suppliers to develop self-driving vehicle technology more quickly. General Motors Co. last year acquired San Francisco autonomous vehicle software company Cruise Automation for $581 million.

Ford said it will combine its team already working on the virtual-driver system with Argo’s people. The automaker said it will continue to head development of autonomous vehicle hardware, system integration, manufacturing and design, and to help manage government regulations.

Ford and Argo officials said Friday in an interview that the exact number of people who will be involved from Ford has not been determined, though a “substantial” number will be part of Argo, Nair said. The companies did not say how many jobs might be filled from the outside. Teams will be integrated within a few months, said Bryan Salesky, Argo CEO and co-founder.

By the end of 2017, Argo, based in Pittsburgh, expects to have more than 200 employees. Those include hires in Southeastern Michigan and the San Francisco area.

Ford CEO and President Mark Fields said in a call with analysts and members of the news media said Argo employees will have ownership in their company and share in financial successes, but would not provide specifics. “There’s a war for talent out there,” Fields said.

Analysts say partnerships with companies versed in computer learning are necessary.

“The competition in this field is intense, though an alliance between Ford and a startup company like Argo AI should accelerate the process for both companies,” said Karl Brauer, executive publisher of Autotrader and Kelley Blue Book.

The Argo AI board will have five members including Nair; John Casesa, Ford group vice president of global strategy; Salesky; Peter Rander, Argo chief operating officer and co-founder; and an independent director.

Salesky declined to provide figures on the current size of the staff, though he described it as small. The website was copyrighted this year. He also declined to say exactly when Argo was founded, other than sometime last year. “We’ve been talking to Ford since late last year to put this together,” he said in a phone interview.

Ford has said its 2017 adjusted pre-tax profits would be less than 2016 as it invests in electrification, self-driving technology and mobility.

In August 2016, Ford announced four investments and partnerships that it said would help it with its autonomous vehicle development. They included investing $75 million in Silicon Valley-based Velodyne, a LIDAR (Light Detection and Ranging) sensor company; acquiring SAIPS, an Israel-based computer vision and machine learning company; investing in Berkeley, California-based Civil Maps to further develop 3-D mapping; and inking an exclusive licensing agreement with Nirenberg Neuroscience LLC, a machine vision company.

Ford Smart Mobility’s subsidiary last year also reportedly invested into Zoomcar, an India-based car rental company like Zipcar.

Argo AI’s four top executives worked at Carnegie Mellon University’s National Robotics Engineering Center prior to roles at Google’s Self-Driving Car Project or Uber Inc.

Salesky, a computer engineer, worked at Google from 2011-16 in several roles, including director of hardware development for the tech giant’s autonomous car project.

Rander was an engineering lead at Uber for nearly two years. He helped “launch, grow and lead” teams involved with Uber’s first-generation of self-driving prototypes, according to his LinkedIn profile.

Brett Browning, Argo AI vice president of robotics, was a senior engineering manager for two years at Uber’s Advanced Technologies Center alongside Rander. He led the mapping and localization efforts for self-driving cars, according to his profile.

Argo AI Chief Financial Officer Daniel Beaven worked at Uber for about two years until recently.

Ford’s stock closed Friday at $12.51 a share, up about 1 percent.

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Staff writer Michael Wayland contributed.