Argo AI completes $2.6B deal with Volkswagen, expands to Europe
Self-driving vehicle startup Argo AI completes a $2.6 billion deal with Volkswagen Group on Tuesday. Argo AI came out of stealth in 2017 with $1 billion in backing from Ford.
The deal makes Argo a global company with two customers – VW and Ford and provides an instant jump in its workforce.
The company has fleets of autonomous vehicles mapping and testing on public roads in Austin, Miami, and Washington, D.C.
As per the deal, Argo AI will develop the virtual driver system and high-definition maps designed for VW’s self- driving vehicles, as it does for Ford’s self -driving vehicles. Ford and VW will share the cost of developing Argo AI’s self-driving vehicle technology under the terms of the deal.
Two years ago, Ford said it might spend $4 billion through 2023 in a newly created LLC dedicated to building out an autonomous vehicle business.
Ford Autonomous Vehicles LLC CEO John Lawler emphasized that “sharing development costs” doesn’t mean Ford is reducing its overall spend in autonomous vehicles. Rather, the company said it will reallocate money towards the development of transportation as a service software and fleet operations for its eventual self-driving service.
In spite of this shared investment, Ford and VW will not integrate on the actual self-driving vehicle service.
Lawler, who is also vice president of mobility partnerships at Ford, said the U.S. automaker “will remain independent and fiercely competitive in building its own self-driving service.”
Argo’s board will now be comprised of two VW seats, two Ford seats, and three Argo seats.