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Argo.ai, driverless startup backed by Ford and VW, shuts down

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Argo AI, the self-driving startup backed by Ford and Volkswagen, is closing The edge has learned. Employees were told an announcement would be made late Wednesday. (The news was first reported by TechCrunch.)

The company, founded by veterans of Google and Uber’s self-driving car projects, has lost financial backing from Ford and VW, a source said. And according to TechCrunch, the company’s funds will be absorbed by both automakers. Argo is estimated to have about 2,000 employees, although it announced a round of layoffs earlier this year. An Argo spokesperson declined to comment.

ford, in an announcement as part of its third quarter results, Argo said it was unable to attract new investors. The automaker plans to “shift its capital expenditure from the L4 advanced driver assistance systems being developed by Argo AI to in-house developed L2+/L3 technology” – commonly associated with advanced driver assistance technology. Ford said it recorded a “$2.7 billion pre-tax non-cash impairment loss on its investment in Argo AI, resulting in a net loss of $827 million for the third quarter.”

In the earnings report, Ford said it had hoped to roll out Argo’s driverless technology as a commercial product in 2021, but was unable to do so.

“Fully autonomous vehicles at scale are still a long way off”

“But things have changed, and there is now a huge opportunity for Ford to give time – the most valuable asset in modern life – back to millions of customers while they’re in their cars,” said Ford CEO Jim Farley in a statement. declaration. . “It is critical for Ford to develop great and differentiated L2+ and L3 applications that at the same time make transportation even safer.”

Farley said some Argo engineers would get jobs at Ford to work on the automaker’s driver assistance products. “We are optimistic about a future for L4 ADAS, but profitable, full-scale, fully autonomous vehicles are still a long way off and we don’t necessarily need to create that technology ourselves,” he added.

Argo was founded in 2016 by Bryan Salesky, the former head of hardware development for Google’s autonomous vehicles (AVs), and Peter Rander, who previously served as the engineering lead for Uber’s self-driving arm. Ford injected $1 billion into the company in 2017, and Volkswagen followed suit with a $2.6 billion investment in 2020.

Argo had fired some employees earlier this year

The funding allowed the company to expand its AV business in the US and abroad. Argo AI is currently testing fully autonomous vehicles in Washington, DC, Miami and Austin and plans to partner with Lyft in those cities. It also partnered with Walmart to implement a driverless delivery service and was working towards its goal of launching an automated rideshare service with Volkswagen in Germany by 2025.

Ford has long touted Argo’s progress as crucial to the automaker’s overarching plans to launch a commercial robotic axi service. Earlier this year, Ford CEO Jim Farley congratulated Argo on removing safety drivers from its vehicles in Austin and Miami, two of the cities where the company tests its vehicles.

“Congratulations to our partners Argo AI!” Farley wrote in a LinkedIn message. “As we work to build and scale a fully autonomous commercial service, this milestone from Argo is a significant step forward in their technology development and the future of transportation!”

Several months later, when it was reported that Argo would lay off about 150 employees, a spokesperson called the company a “critical partner of our self-driving service, and we will continue to support and collaborate with them to develop the self-driving technology that will power our self-driving service.” .”

But cracks began to form in these multi-billion dollar companies. Argo’s main rivals, Waymo and Cruise, had seen major changes in leadership. Valuations have fallen as timelines stretch further and further. Companies that have gone public through SPAC have seen their share price fall. Costs have risen as revenues trickle in.

Argo came very close to merging with a SPAC, which stands for Special Acquisition Company, and went so far as to choose JP Morgan Chase and Morgan Stanley to manage its most recent financing round. The company would go public with a valuation of $7 billion.

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