Argo AI, a promising developer of self-driving car technology that raised billions of dollars from Ford and Volkswagen, is shutting down operations and being dissolved, according to a media report citing unnamed sources.
The startup, led by former Google and Waymo engineer Bryan Salesky, informed its 2,000 employees about the development on Wednesday and said some would be offered jobs at the two automakers, according to TechCrunch, citing people familiar with the matter. Exactly how many employees will receive offers is unclear, according to the report.
Prior to the TechCrunch story, Forbes sought to confirm information that Argo’s automotive partners planned to end funding for the venture. Neither Argo nor Volkswagen responded to requests for comment.
Argo began as an ambitious effort by Ford to catch up to Alphabet’s Waymo and General Motors-backed Cruise in developing proprietary software and components needed to commercialize self-driving cars and trucks. Volkswagen joined the venture by investing $2.6 billion into Argo in 2019. Given that the startup, which has test vehicles in Miami, Austin and Pittsburgh, was among the better-funded AV companies, its dissolution comes as a surprise.
“It looks like a two-horse race now between Waymo and Cruise,” said Grayson Brulte, whose consultancy Brulte & Co. advises companies on autonomous technology and mobility. “At this point, it’s healthy that the industry is consolidating.”
The challenge of creating commercially viable autonomous vehicles has turned out to be far more difficult than advocates for the technology anticipated five or six years ago. Currently, Waymo is the only company with a revenue-generating robotaxi service, which runs around the clock in parts of suburban Phoenix. Cruise has launched a limited public robotaxi service in San Francisco, though it operates mainly at night when traffic is light. Waymo is also preparing to offer its ride service in San Francisco and last week said it’s coming to Los Angeles. Zoox, a startup owned by Amazon, is also developing an electric robotaxi but hasn’t said when its service will launch.