Ford Makes a Move in the AI Talent War

Ford Makes a Move in the AI Talent War

The automotive giant has entered the fray with a $1 billion purchase of a majority stake in Argo, a Pittsburgh-based artificial intelligence startup founded by former top engineers from the self-driving vehicle divisions of Alphabet and Uber, Recode’s Johana Bhuiyan reported on Friday:

This is the largest investment a traditional auto manufacturer has made in self-driving technology. General Motors acquired self-driving startup Cruise for $1 billion last year, and Uber bought autonomous trucking company Otto for $680 million, also last year. Ford will dole out the $1 billion over a five year schedule but will immediately become the majority shareholder. The company declined to disclose its specific stake, but the investment would value Argo at over $1 billion.

Ford says Argo will remain headquartered in Pittsburgh and operate with substantial independence. Both Ford and Argo elect two board seats, with a fifth independent position. Ford plans to install Raj Nair, head of research and development, and Vice President John Casea to the board.

Ford’s AI buy follows on similar moves last year by General Motors, as a talent war shapes up between Silicon Valley and Detroit for the scarce, precious resource that is AI talent. This race between the legacy auto manufacturers, tech giants like Google, and upstarts like Uber and Tesla to develop self-driving cars and beyond is part of manufacturing’s high-tech evolution. Factories, like all of us, are digital employers now.

Verge reporter Nick Statt interprets Ford’s investment as an effort to claim its slice of the nascent self-driving car industry before it really takes off. “Ford may be one of the largest American companies,” Statt observes, “but it does not have pockets as deep as Apple and Google”:

That makes this $1 billion investment a significant push to own the expertise of some of the robotics world’s brightest and most experienced self-driving experts. … Ford clearly does not want to see Silicon Valley outbid it for top talent. And because autonomous vehicles require extensive knowledge of computer vision, robotics, machine learning, and other complex fields, the talent pool is relatively narrow. … So by scooping up Argo, Ford is staking out a strong position in the industry that may give it an edge over tech companies.