According to a recent report, the global self-driving car market is expected to grow 36% annually over the next few years to $173.15 billion by 2023. In the coming years, the acceptance of the technology by governments will be on the rise, resulting in industrial applications of autonomous driving technology. Pittsburgh-based Argo AI is among the leading vendors in the space.
Argo AI’s Offerings
Argo AI was set up in 2016 by Bryan Salesky and Peter Rander to develop self-driving technology that offers a safer, more affordable, convenient, and accessible way for everyone to get around. To meet this objective, the founders partnered with leading automakers to help build self-driving vehicles not only for the ride hailing industry but also for goods delivery fleets in large cities. Argo AI helps build self driving capabilities by integrating AI with extensive engineering and testing to deliver a solution that is safe for the users.
It is developing a production-quality self-driving system (SDS) including software, sensors, and computing capability that powers self-driving vehicles. Its biggest investors and customers are Ford Motors and Volkswagen. Together, these two companies are helping in product development and adoption of Argo’s technologies by integrating its SDS into their vehicles. The automakers bring together extensive manufacturing experience and a global footprint. The partnership has helped Argo AI’s SDS become the first such system with commercial deployment plans for Europe and the US and the one with the biggest geographical reach potential.
Argo AI’s Financials
Argo AI is a privately held company that has raised $3.6 billion so far. In 2017, Ford Motors announced an investment of $1 billion in Argo AI to gain a majority stake. Earlier this year, Volkswagen announced plans to invest $2.6 billion in Argo AI at a valuation of $7 billion. Volkswagen’s investment included $1 billion in cash and the addition of its Munich-based Autonomous Intelligent Driving (AID) group that was valued at $1.6 billion.
Analysts see this as a tremendous opportunity for all the three players. They believe that electrification and automation technologies are harder to differentiate between brands and by combining development efforts on technologies that are less likely to be product differentiators, the three players will be able to offer significant cost savings. Volkswagen has been trying to establish its presence in the autonomous driving segment. Till earlier this year, it had been working with Aurora, another self-driving technology player. The two players did not divulge reasons for terminating the partnership, but reports suggest that Volkswagen wanted more ownership of the technology than Aurora was willing to part with.
The addition of Volkswagen to Argo’s investor list will help Argo expand its market reach significantly. It now has access to more engineering resources and technologies and the ability to test its offerings in Europe.
Argo is not the only player in the industry. Rivals like Aurora and Cruise themselves have tie-ups with other automakers to deliver similar technology. All these companies are looking to build a safe, autonomous vehicle technology. Researchers believe that the growth of autonomous vehicles will result in the growth of transportation-as-a-service. But adoption of the technology will be closely monitored by government authorities globally. Autonomous vehicle testing appears safe in closely managed environments, but as recent incidents have suggested, they may fail to maintain that level of safety in real-life situations.