Automakers’ AI Startups Expand, Pulling Talent from Silicon Valley

Automakers’ AI Startups Expand, Pulling Talent from Silicon Valley

In a sign of how serious the US automobile industry is about beating Silicon Valley to marketable self-driving cars, several AI startups working on this technology have multiplied in size since being bought by legacy automakers over the past two years, Christina Rogers reports at the Wall Street Journal. Argo AI, an artificial intelligence startup founded in Pittsburgh by former top engineers from the self-driving vehicle divisions of Alphabet and Uber, had fewer than a dozen employees when Ford Motor Company bought a $1 billion majority stake in it early last year. Today, it has 330 employees, including a number of software engineers and robotics researchers formerly employed by major tech companies like Apple and Uber.

Argo attracted these employees with an equity offer for new hires, which big tech companies can’t offer, Chief Executive Bryan Salesky tells Rogers. This ensures that each employee is “able to benefit from the upside being created in a direct way”—a potentially massive payoff given that Argo is helping Ford prepare to bring a fully autonomous car to market in 2021 while also developing a system it can sell to other companies. Being backed by a major company, but not owned outright or micromanaged by that company, gives Argo the agility to continue operating like a tech startup, while also benefitting from Ford’s economies of scale to manufacture and market the products it designs.

General Motors also bought a self-driving car startup, Cruise Automation, as part of a series of high-tech investments in 2016 that signaled the company’s intent to develop autonomous vehicles and made it a more attractive employer for tech talent. San Francisco-based Cruise, which GM also spent $1 billion to acquire, has staffed up to 740 employees and got $2.25 billion investment from Japan’s SoftBank Group last month, Rogers adds. Japanese automakers like Toyota and Nissan are also investing in the development of robotics and autonomous driving technology.

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