Ford Motor Co. has bought a majority share in a small artificial intelligence start-up that will help the automaker get driverless vehicles on the road, Ford Chief Executive Mark Fields announced Friday.
Argo AI, based in Pittsburgh, will provide the "brains" for virtual driving systems. Argo becomes a Ford subsidiary and will work intimately with Ford engineers to integrate driverless software with sensors and other hardware systems that will be built into Ford vehicles, Fields said.
Ford will invest $1 billion in Argo over the next five years. For now the company will focus exclusively on Ford, but in the future the company could license its driverless technology, Fields said.
The ownership structure is a bit unusual. When General Motors bought a start-up called Cruise Automation last year for similar reasons, it purchased the whole thing and subsumed it within GM.
The founders of Argo, however, will continue to hold significant stakes in the company, and the subsidiary, with its own board of directors, will offer equity as compensation to attract top engineering talent in an emerging area where experienced professionals are hard to come by.
The deal offers "the benefits of a tech start-up … with the scale and discipline we have at Ford," Fields said.
Argo is tiny. The two founders who took the stage with Ford executives at the San Francisco announcement Friday declined to say how many employees work there.
"More than two?" a reporter asked. They said yes, but wouldn't put a number on it. The company will work with "hundreds" of Ford employees now developing driverless cars in Michigan and in the San Francisco Bay Area.
The company may be small but the founders cut large figures in their field. Chief Executive Bryan Salesky worked on hardware development for self-driving systems at Google. Chief Operating Office Peter Rander worked on driverless technology at the Uber Advanced Technologies Center in Pittsburgh.
Both have deep roots at Carnegie Mellon University in Pittsburgh, one of the world's leading centers for robotics and artificial intelligence. (A Carnegie Mellon team won the DARPA 2007 Urban Challenge, part of a series of autonomous car contests that sparked the driverless car phenomenon.)
Salesky said Argo and Ford hold a "shared vision" on driverless technology. "They are very aligned with us on how we see the technology progressing," he said.
"We felt this was a really smart way to be able to get funded," he added, also suggesting he'd rather deal with Ford and its industry expertise than with venture capitalists.