Volkswagen AG seals $2.6 billion investment in self-driving startup Argo AI

By Rahul Vaimal, Associate Editor
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Renowned German car manufacturer Volkswagen Group sealed its $2.6 billion investment into Argo AI, a self-driving car startup based out of the Pittsburgh that came out of nowhere in 2017 with $1 billion in sponsorship from Ford.

The transaction turns Argo into a global player with two clients, VW and Ford, expands its operations in the U.S. and Europe and provides an instantaneous rise in its workforce capacity. Autonomous Intelligent Driving, the self-driving subsidiary that was begun in 2017 to create autonomous vehicle technology for the VW Group, will be incorporated into Argo AI. AID’s Munich offices will convert into Argo’s European headquarters.

That alliance, which can start instantly as the deal has now finalized, will expand Argo’s workforce to more than 1,000 people. Argo also has facilities in Detroit, Palo Alto, and Cranbury, New Jersey. The company has squadrons of autonomous vehicles mapping and testing on public roads in Austin, Miami and Washington, D.C.

Argo AI is enhancing the virtual driver system and high-definition maps designed for Ford’s self-driving vehicles. That task now extends to VW. Ford and VW will share the expense of improving Argo AI’s self-driving vehicle technology under the terms of the deal.

“Building a safe, scalable and trusted self-driving service, however, is no small task. It’s also not a cheap one.”
– John Lawler, CEO
Ford Autonomous Vehicles LLC 

A couple of years ago, Ford announced that it would contribute $4 billion within 2023 in a newly created LLC committed to developing an autonomous vehicle business. Ford Autonomous Vehicles LLC has the company’s self-driving systems integration, autonomous-vehicle research and advanced engineering, AV transportation-as-a-service network development, user experience, business strategy and business development units.

Lawler indicated that “sharing development costs” doesn’t mean Ford is decreasing its overall funding in autonomous vehicles. Rather, the firm will shift the money towards the development of transportation as a service software and fleet services for its eventual self-driving service.

Despite this distributed financing, Ford and VW will not cooperate on the actual self-driving vehicle service. Lawler, who is also vice president of mobility partnerships at Ford, stated the U.S. automaker “will remain independent and fiercely competitive in building its own self-driving service.”

Argo’s council will now have two seats for VW, two for Ford and three for Argo.