The competition of building a self – driving car keeps on becoming more expensive and intense.
On Friday afternoon, Ford (F) announced that it will invest $1 billion in a recently unheard of startup.
Led by Uber veterans and Google, Argo Al will join the existing Ford’s team in developing a fully self-driving car.
It is the latest pricey investment that has been made by a major pioneer for self-driven cars.
It is almost a year now since General Motor (GM) spent $1 billion in acquiring Cruise automation. In last August, $680 million was spent by Uber on Otto which is a self -driving car startup led by Google (TGOOGL, Tech30) engineers that did not exist before, reports Business Insider.
The startup, Argo AI, was founded by Bryan Salesky, the former director of hardware for Google’s self-driving-car efforts, and Peter Rander, Uber’s engineering lead at its autonomous cars center.
Ford is just a majority stakeholder in Argo AI but has not acquired all of the startup. In the company, Argo Al will have equity in order to attract talent. The same arrangement has been put in trial by other companies amid intense competition for qualified engineers.
According to CEO John Krafcik, the arrangement would help in to better align incentives for their employees. John said these when Google spun off its project for self-driving car as Waymo in last December.
Argo Al is planning to employ about 200 workers by the end of this year. These employees will be split among Pittsburgh, Michigan and Silicon Valley.
Bryan Salesky the Argo Al CEO said that he had spent a period of three years as he works at Google’s self-driving car program. And in the year 2016, he left. Another period of two years was spent by his cofounder, Peter Rander as he works on Uber’s autonomous vehicle team in Pittsburgh.
A warning had been issued by experts that legacy automakers like Ford are risking being disrupted by tech companies such as Google. Tech companies are in possession of the software expertise that is a requirement for building a self-driving car.
Automakers found themselves in the doomsday when they turn to Nokia- a leader in cell phones worldwide before the iPhone was unveiled by Apple. During the smartphone revolution, Nokia was unable to keep. It only watched as Silicon Valley titans Apple (AAPL, Tech30) and Google make profits.