The investment, which will be made over the course of the next five years, could help push the company's efforts towards an AI-driven, ride sharing fleet by 2021. Both were previously at the robotics institute at Carnegie Mellon University, where they worked on artificial-intelligence (AI) technology.
Founded late a year ago, Argo AI is so new that it has no website, doesn't appear in web searches and declined to say how many employees (if any) it has. According to a news release from the company, Ford's plans also include the ability to license the Argo AI technology to other companies looking for AI capability.
The unusual deal marks the next step in Ford's journey toward building a vehicle without a steering wheel or brake pad by 2021 - a vision that CEO Mark Fields laid out last summer.
"We're in a critical period that will determine how the autonomous-vehicle market will shake out: Will the automotive industry close the gap with the software industry, or will it become an OEM supplier to the software industry, as happened in the cellphone market?" Nearly every tech company is eying the niche and most major firms are now involved with the efforts to develop self-driving systems in one way or the other. That software could be licensed to other companies, CEO Mark Fields said, and it's possible that Argo AI will go public at some point. "As Ford expands to be an auto and a mobility company, we believe that investing in Argo AI will create significant value for our shareholders by strengthening Ford's leadership in bringing self-driving vehicles to market in the near term and by creating technology that could be licensed to others in the future".
Ford will hold a majority stake in the new company.
Ford's global product chief and CTO, Raj Nair, and group vice president of global strategy, John Casesa, will hold two of the five seats on Argo AI's board.
Ford's investment means Argo has scored a significant source of funding that will enable it to become a major and immediate player in the artificial intelligence space, while helping the carmaker stay at the forefront of the autonomous vehicle race.
The investment in Argo AI is a smart move for Ford, a traditional auto company racing against tech giants such as Google and non-traditional vehicle companies such as Tesla Inc. It's an intriguing idea; it could turn out to be a brilliant one.
The research will be focused on a virtual driver system capable of operating at what's called "SAE level 4".