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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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.

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How Business Leaders Have Responded to Trump’s Travel Ban

How Business Leaders Have Responded to Trump’s Travel Ban

The executive order issued by President Trump on Friday, which temporarily barred refugees and citizens of seven designated countries—Iran, Iraq, Libya, Somalia, Sudan, Syria, and Yemen—from entering the US, has been met with some criticism from the ranks of America’s corporate leaders. In statements to employees and to the press, many CEOs have expressed concern that either the order itself or the new administration’s more restrictive approach to immigration in general will be disruptive to business and harmful to their ability to hire and retain talent, as well as their diversity and inclusion initiatives. The Washington Post’s Jena McGregor gives an overview of corporate America’s reaction to the president’s polarizing order:

“Employees do hold their CEOs and leadership accountable for defending those values when the line has been crossed,” said Leslie Gaines-Ross, Weber-Shandwick’s chief reputation strategist. After years of communicating and focusing on diversity and inclusion as a corporate value, she says, CEOs “do feel under a lot of pressure right now, and are trying to figure out what to say about Trump’s ban and how to speak to their employees. They’ve set a high bar and an expectation that diversity really matters. That is adding a lot of firepower to getting CEOs to speak up.”

Some of the statements from CEOs have included not only concerns but personal reflections. “I am deeply concerned, as many of you are, with this fracture in our society,” wrote MasterCard CEO Ajay Banga, who was born in India. “I am an immigrant into this wonderful country. I came here midway through my career and have over the past years made this my home and pledged my allegiance to all that the Constitution stands for.” …

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