Ford bets $1B on self-driving car startup

SAN FRANCISCO — Ford Motor is betting $1 billion on the world's self-driving car future.

The Detroit automaker announced Friday that it would allocate that sum over five years to a new autonomous car startup called Argo AI, which is headquartered in Pittsburgh, Pa., and will have offices in Michigan and California.

Ford's financial outlay is part of a continuing investment strategy anchored to transforming the car and truck seller into a mobility company with a hand in ride-hailing, ride-sharing and even bicycle rentals.

Argo AI was cofounded a few months ago by Google car project veteran Bryan Salesky and Uber engineer Peter Rander, who met while working at Carnegie Mellon University's vaunted robotics and engineering school.

"The reason for the investment is not only to drive the delivery of our own autonomous vehicle by 2021, but also to deliver value to our shareholders by creating a software platform that can be licensed to others," Ford CEO Mark Fields told USA TODAY. "This move gets us the agility and speed of a startup combined with Ford's global scale."

Salesky, a self-driving car hardware specialist who left Google's renamed Waymo car program last fall, said that he decided to start his own company with Rander because of "the incredible advancements in machine learning, artificial intelligence and computer vision, but we just needed a partner to get these cars into the hands of millions of people."

Ford's early stage investment in Argo AI reflects a growing desire on the part of automakers and tech companies to combine forces to tackle the still daunting task of making autonomous driving an everyday reality.

Uber + Volvo, Fiat + Waymo/Google

Uber is busy testing self-driving car software in a $300 million partnership with Volvo, while Fiat Chrysler Automobiles has teamed up with Waymo to create a fleet of 100 self-driving Pacifica hybrid minivans. Waymo CEO John Krafcik, a veteran of Hyundai North America, has also indicated that his company plans to sell its technology to other automakers.

Chinese giant Baidu had hoped to give its self-driving program a boost through a partnership with BMW, before that venture fell through last fall due to differences on project trajectory. And a growing number of small startups, such as Silicon Valley's Drive.ai, also are looking to grab a slice of this pie.

Most experts working in this increasingly crowded field are targeting 2021 for delivering autonomous cars to consumers, likely as part of a commercial ride-sharing fleet.

Hiring plans

Argo AI will focus on what amounts to the self-driving car's computer brain, which relies of computer algorithms to process data coming from an array of sensors — radar, lasers, cameras — that help the car navigate through its environment. Ford's engineers working in this arena will join forces with Argo AI, which is hiring now and hopes to have 200 engineers by the end of 2017.

"That virtual driver system, that brain, needs a platform to power, and that's where our expertise in building cars comes in," said Ford CTO Raj Nair. "Partnering with Argo.ai is a hybrid model of collaboration that captures the best of both worlds."

While technological innovation in this space races ahead, the societal integration of autonomous vehicles continues to hit speed bumps.

Last year, outgoing Department of Transportation chief Anthony Foxx had the National Highway Traffic Safety Administration draft a series of guidelines aimed at developing a set of national rules for the operation of self-driving cars. Newly installed DOT head Elaine Chao has yet to reveal her views on autonomous vehicles or the NHTSA guidelines, while President Trump has aimed his infrastructure plan comments more toward bridges, roads and trains.

Fields, who recently met with Trump along with other automaker CEOs, was optimistic that a set of standards will be agreed upon eventually.

"NHTSA understands the economic, social and safety benefits of AV (autonomous vehicles)," said Fields. "Our approach is to make sure we develop one national standard, not 50 states with 50 sets of rules."

Recently, Uber started to test its self-driving Volvos near its Bay Area headquarters, but the same day the state's Department of Motor Vehicles ordered the company to stop because its cars did not have the proper registration for such testing. Uber says it is working with the DMV on the matter, but in the meantime sent all its cars to test in Arizona.

Michigan also is positioning itself as a self-driving-friendly state. In December, its governor was the first to sign a law that allows companies to test self-driving vehicles without steering wheels, pedals or a human that can take over in an emergency. That's a contrast to California, which strictly enforces a rule that self-driving vehicles can only hit the road with a safety driver.

This week, Uber's self-driving truck company, Otto, found itself the target of advocacy group Consumer Watchdog, which provided Uber documents that it said proved Otto was testing self-driving trucks illegally in the Bay Area. The DMV is reviewing the matter.

Follow USA TODAY tech reporter Marco della Cava on Twitter.