Ford invests $1B in robotics startup in driverless car quest – CBS News

SAN FRANCISCO - Ford Motor (F) is spending $1 billion to take over a robotics startup to acquire more of the expertise needed to reach its ambitious goal of having a fully driverless vehicle on the road by 2021.

The big bet announced Friday comes just a few months after the Pittsburgh startup, Argo AI, was created by two alumni of Carnegie Mellon Universitys robotics program, Bryan Salesky and Peter Rander.

Salesky formerly worked on self-driving cars at a high-profile project within Google- now known as Waymo - and Rander did the same kind of engineering at ride-hailing service Uber before the two men teamed up to launch Argo late last year. Argo had been considering whether to raise money from venture capitalists, the conventional fundraising channel for startups, before opting to become an independent subsidiary of Ford instead.

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Ford is spreading its $1 billion investment over a five-year period.

The alliance between Argo and Ford aims to combine the spunk and dexterity of a technologically savvy startup with the financial muscle and manufacturing know-how of a major automaker.

The unusual deal marks the next step in Fords journey toward building a vehicle without a steering wheel or brake pad by 2021 - a vision that CEO Mark Fields laid out last summer.

The decision to turn to Argo for help is a tacit acknowledgement that Ford wouldnt be able to pull it off on its own.

This is likely a realization that Ford is behind relative to companies like GM, Audi, Volvo, Waymo and Uber, and is trying to catch up, said Raj Rajkumar, a Carnegie Mellon computer engineering professor who leads the schools autonomous vehicle research.

Ford is counting on Salesky and Rander to hire about 200 employees during the next year while working on the core technology of its autonomous vehicle - the virtual driver system.

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That will serve as cars brains, eyes, ears and senses, said Raj Nair, Fords chief technical officer who also leads the companys product development.

Competitors such as NVIDIA have developed artificial intelligence that learns about different situations as its tested on roads, something that is almost essential for an autonomous car to function in heavy traffic on city streets.

In return for its funding, Argo will design its driverless system exclusively for Ford and then have a chance to license the technology to other automakers in the future.

If Argos system turns out to be far ahead of anything else on the market, the subsidiary could eventually be worth substantially more than it is now. Argo employees, who will work from offices in Pittsburgh, Michigan and the Silicon Valley, will be given stock in the subsidiary as part of their compensation packages so they will be enriched if their Argos technology becomes a hot commodity.

Ford isnt the first company to spend huge sums to obtain more experience and skills in robotics. Uber bought autonomous trucking startup Otto for an estimated $680 million last summer primarily to get Ottos engineers on its team working on driverless vehicles. Otto co-founder Anthony Levandowski, another former Google engineer, is now overseeing Ubers testing of driverless cars in Pittsburgh and Arizona.

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Ford invests $1B in robotics startup in driverless car quest - CBS News