Argo AI by Ford and VW officially announced to shutdown. The Key reason behind the closure is not clear yet nor announced. Further, they announced that some workers would be adjusted in Ford.
According to a report by TechCrunch on Wednesday, the self-driving firm Argo AI will cease operations and have its workers and components acquired by its principal investors, Ford Motor Co and Volkswagen AG. Argo informed its workforce that a few would get offers from Ford and Volkswagen. However, it was unclear how many would accept the offers or be let off altogether.
A source claims that Ford and VW have cut ties with the startup after learning that it was created by former employees of Google and Uber’s self-driving vehicle initiatives. TechCrunch reports that both manufacturers will absorb the firm’s resources. Although layoffs were announced earlier this year, Argo is thought to have roughly 2,000 workers.
“In coordination with our shareholders, the decision has been made that Argo AI will not continue on its mission as a company. Many of the employees will receive an opportunity to continue work on automated driving technology with either Ford or Volkswagen, while employment for others will unfortunately come to an end.”Techcrunch
Argo AI, an autonomous car business that emerged in 2017 with a $1 billion investment, is reportedly shutting down, with its components being acquired by its two primary investors, Ford and Volkswagen.
Why Ford Argo AI Going To Shut Down
Multiple anonymous sources claim that Argo AI personnel were informed at a Wednesday all-hands meeting that some of them would get offers from the two car companies. The number of people employed by Ford and Volkswagen and the firms receiving Argo’s technology remained unknown.
Argo AI began developing its autonomous vehicle technology in 2017 after receiving $1 billion from Ford over five years. The firm raised about $2.6 billion in new capital, mostly from Ford and VW. Ford Fusion and Ford Escape Hybrids were often seen undergoing public road testing in several U.S. locations, suggesting that development was proceeding well. Ford decided to move its focus from autonomous car technology to sophisticated driver-aid systems, while Argo AI failed to gain further financing.
Ford’s investment in Argo weighed on the automaker’s finances. Its $2.7 billion “non-cash, pretax impairment” on its investment in Argo AI contributed to a net loss of $827 million for the quarter, as reported in the company’s results report for the three months ending on Wednesday.
Ford said in a statement that the failure to launch a commercial robotaxi vehicle by 2021 was partly due to Argo’s failure to recruit fresh investors. The automaker aims to “move its capital investment from the L4 advanced systems for driver assistance being built by Argo AI to domestically created L2+/L3 technology,” which is often linked with such technologies.
A representative for Waymo said, “We will continue to assist them and work together on building the self-driving technology that will power our self-driving service”, when it was announced some months later that Argo was laying off roughly 150 staff.
However, these multibillion-dollar corporations began to show signs of weakness. Major leadership changes occurred at Argo’s primary competitors, Waymo and Cruise. As completion dates have been pushed further, valuations have fallen. It’s been a rough ride for the stock of SPAC IPO’d companies thus far. In contrast to the rising expenses, income has been slow to materialize.
Argo almost merged with a particular acquisition company (SPAC) when it hired JPMorgan Chase and Morgan Stanley to handle its most recent fundraising round. It was reported that the firm would be valued at $7 billion when it went public.