Over the next five years, Ford will invest $1 billion in artificial intelligence startup Argo AI. The company helps build the brains of its robot cars.
Argo AI, a Pittsburgh company, specializes in virtual driver systems and robotics. The company will assist Ford’s autonomous vehicle team, that is preparing to market a fully self-driving car in 2021.
Bryan Salesky, formerly of Google and Peter Rander, formerly of Uber founded Argo last year. Both men left their companies late last year to go form Argo AI.
“When talent like that comes up, you don’t ignore that availability,” said Raj Nair, Ford’s product chief and chief technical officer. “This really increases the robustness of our ability to deliver this vehicle in 2021.”
Ford will become a major stakeholder in Argo, as part of the investment. Ford’s group vice president of global strategy, Nair and John Casesa will also be sitting on Argo’s five-person board.
Along with its headquarters in Pittsburgh, Argo will also have offices in southeastern Michigan and California, according to Ford. The company will employ more than 200 workers at the three sites.
The software that Ford will develop with Argo could potentially be licensed to other companies, Ford says. CEO Mark Fields also noted that the investment could also be an IPO.
“There’s potential to create significant value in the company,” Fields said.
The new investment is part of Ford’s moves to offer transportation alternatives to the traditional car and truck.
In 2016, the company created a Smart Mobility subsidiary to invest in other emerging mobility opportunities as part of their moves to transportation alternatives.
The company expects that 2017 pretax profits will be less than the $10.2 billion earned in 2016 due to the increased investments into new mobility services.
Ford has been working on self-driving vehicles for a decade, just last year disclosing its plans to develop a fully driverless car – without a steering wheel and gas or brake pedals – for commercial use.
Nair said that Ford is already “beyond the research phase” in developing the self-driving car. However, he did also note there is much more advanced engineering that needs to take place before the car will be fully ready.
Ford is already testing autonomous cars on public roads. The company has tested cars in Michigan, California and Arizona – logging 590 self-driving miles for the 12 months ending November 30 in California, according to the company.
Ford has not yet released the financial results of Ford Smart Mobility.