MADISON, Wis. – Until 10 days ago when Ford announced a $1 billion investment in Argo AI (Pittsburgh), it was just another anonymous tech startup.
And it was really new. Argo AI was founded only last November by two AI robotic experts (Bryan Salesky originally from Google, and Peter Rander from Uber). The company cleverly avoided notice entirely, until Ford came calling.
That got us thinking.
How many tech startups are out there – waiting to be snatched up, or hoping to become the next Waymo (formerly the Google self-driving car project)?
And more importantly, who are they?
Clearly, the recent Ford-Argo AI announcement illustrates how both car OEMs and tech startups have been courting one another, but getting any eventual union done right is no cakewalk.
This deal shows a lot of the finesse, care and advance thinking Ford needed to lure Argo AI’s founders, and to create a business model that works for both parties.
Ford came up with what its President and CEO Mark Fields calls a “hybrid model.” Ford becomes the majority stakeholder in Argo AI, but Argo AI will operate with substantial independence. The startup will have significant equity in the company, making it easier to hire top talent.
When General Motors bought self-driving tech startup Cruise Automation a year ago for more than $1 billion, GM initially looked like it overpaid. In reality, the automaker structured the deal to pay out $1 billion over a long period. Obviously, GM needs to keep the engineering team intact, and they didn’t want Cruise guys to cash out.
Moreover, Egil Juliussen, director research, Infotainment & ADAS at IHS Automotive, said GM has kept Cruise as a separate group, with the Cruise team focused on integrating their technology only on electric vehicles, not in other GM models. “That’s absolutely the right way to do it,” said Juliussen. “I am impressed how well GM has adopted the Cruise team.”
Ford-Argo AI’s model is a little different, since some of the Ford autonomous-vehicle team are scheduled to be integrated in its subsidiary, Argo AI.
In either way, the moral of the story isn’t just finding the right partner. It takes more than a simple acquisition to make a marriage work.
So, where is the engineering talent car OEMs are seeking today?
Noting that practically every car OEM has set up a Silicon Valley office, Mike Demler, senior analyst of The Linley Group, told us, “I’m sure some have made strategic investments” in tech startups. Other work has been also done through University alliances, such as Stanford’s CARS program, he added. “Several carmakers are members of that program.”
The Center for Automotive Research at Stanford (CARS), launched in 2008, pursues knowledge essential to building vehicles of the future by bringing together researchers, students, industry, government and the community to “understand how people and machines work together.”
Besides Stanford, there are similar programs at Carnegie Mellon University, University of Michigan and others, Demler added.
Phil Magney, founder and principal advisor for Vision Systems Intelligence (VSI), believes OEMs, besides unearthing researchers in ivory towers, might discover developers in the open-source community.
“When it comes to AI, it is possible that the open source community will get their share of the pie.” He cited the Udacity project. The market is becoming much more open as an industry organization such as the Khronos Group has also formed a working group to look into deep learning. The Khronos Group is now creating a standard file format for exchanging deep learning data between training systems and inference engine, said Magney. “This applies to Convolutional Neural Networks and AI architecture used for visual processing.”
We asked industry analysts to talk about independent tech startups focused on the development of autonomous driving.
Some might be ripe for picking, others are not. In a recent interview with EE Times, Laszlo Kishonti, founder and CEO of AImotive (formerly AdasWorks), told us, “We enjoy being independent.” Aside from several different projects going on with companies such as Ceva, Intel, Nvidia and Kyocera, Kishonti said, “We’re poised to make larger deals with other companies. We are currently overshooting our revenue target.”
In the following pages in alphabetical order, EE Times shares a current list of autonomous driving startups. Their focus is on their “autonomous vehicle” platform instead of specific key components such as lidars, vision or connectivity.
To read the rest of this article, visit EBN sister site EETimes.