Ford to invest $1 billion in artificial intelligence startup

Ford says the software it develops with Argo could potentially be licensed to other companies. Photo credit: BLOOMBERG

Ford Motor Co. is investing $ 1 billion over the next five years in artificial intelligence startup Argo AI.

The Pittsburgh company will help Ford develop a virtual drive system for its autonomous vehicle, coming to market in 2021. Argo was founded by Bryan Salesky, formerly of Google, and Peter Rander, formerly of Uber. Both are alumni of the Carnegie Mellon National Robotics Engineering Center.

“The next decade will be defined by the automation of the automobile, and autonomous vehicles will have as significant an impact on society as Ford’s moving assembly line did 100 years ago,” Ford CEO Mark Fields said in a statement Friday. “We believe that investing in Argo AI will create significant value for our shareholders by strengthening Ford’s leadership in bringing self-driving vehicles to market in the near term and by creating technology that could be licensed to others in the future.”

Ford says the software it develops with Argo could potentially be licensed to other companies.

Argo AI COO Peter Rander, from left, Ford CEO Mark Fields, Argo AI CEO Bryan Salesky, and Raj Nair, Ford’s chief technical officer.

As part of the investment, Ford will become a majority stakeholder in Argo, and John Casesa, Ford’s group vice president of global strategy, and Raj Nair, the automaker’s product chief and chief technical officer, will sit on Argo’s five-person board.

By the end of this year, Argo will have offices in southeastern Michigan and California, according to Ford, along with its Pittsburgh headquarters. It will employ more than 200 workers at those three sites, combined.

Last March, Ford created a Smart Mobility subsidiary to invest in its emerging mobility opportunities as it begins to invest more in services outside traditional car and truck ownership.

Later that year the subsidiary purchased Chariot, a San Francisco-based on-demand shuttle service that has since expanded to Austin, Texas. Ford recently said Chariot would expand to eight cities by the end of 2017, including a city outside the U.S.

Ford has not released financial information related to Ford Smart Mobility, although a financial category labeled “all other” — which includes Ford Smart Mobility LLC and its Central Treasury Operations — lost $ 867 million last year, a $ 71 million higher loss compared to a year ago, according to a document filed with the Securities and Exchange Commission.

Ford has said it expects its 2017 pretax profit to be less than the $ 10.2 billion it earned in 2016 because of increased investments in mobility services.

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