Ford and VW Absorb Argo AI as Autonomous Startup Shuts Down
Backed by Ford and Volkswagen, autonomous vehicle startup Argo AI closes its doors after failing to attract new investors. The automakers are absorbing the company's technology and offering positions to some of its 2,000 employees.
Ford and Volkswagen-backed autonomous vehicle startup Argo AI shuts down after failing to secure additional investors. The company, which launched in 2017 with a massive $1 billion investment, tells its more than 2,000 employees during an all-hands meeting that it will not continue its mission as an independent entity. Instead, its parts are being absorbed directly into its two main automotive backers.
Ford reveals in its third-quarter earnings report that it records a $2.7 billion non-cash pretax impairment on its Argo AI investment, leading to an $827 million net loss for the quarter. Ford CEO Jim Farley explains that the automaker is shifting its strategic focus away from fully autonomous robotaxis and toward developing advanced driver assistance systems like L2+ and L3 applications. Farley notes that the company plans to purchase autonomous vehicle technology down the line rather than developing it in-house.
Argo AI is providing a generous severance package to all of its employees, which includes health insurance and two separate bonuses. While some workers receive offers to continue developing automated driving technology at Ford or VW, others face termination with additional severance pay. The founders speak directly to the workforce to explain the closure, marking a significant shift in the autonomous vehicle industry's landscape.