Ford and VW-backed ‘Argo AI’, the autonomous vehicle technology company, is shutting down. The company, which was once hailed as the leader of autonomous driving systems, failed to attract other investors and will now have a part of its resources absorbed by two of its primary investors. 

In 2017, Ford invested $1 billion in Argo AI eyeing autonomous vehicle technology to be available for commercial use by 2021. But, with heavy cash burn and technology still a “long way off”, the company’s priorities seemed to have changed. Jim Farley, CEO, Ford

 Motor Company also said that there is “potential for attracting revenue streams tied to L3” and that the company will use its resources in deploying the L3 BlueCruise System. 

The Great Consolidation

Another report pointed out that Ford’s investment in Argo AI came at a time when there was a huge hype around autonomous vehicle technology which was still at a nascent stage. VCs were cashing in on these startups, many of which were founded by early pioneers of Google’s self-driving project. However, soon after, the weight of the task became prominent. The report further claims that, “A wave of consolidation washed over the industry with companies folding, being absorbed into other companies, including Apple. Others, turned to the public market either through a traditional IPO like TuSimple, or by merging with a special purpose acquisition company as Aurora did in hopes of gaining the capital it needs to continue its mission.” 

The statement is reflective of Mobileye CEO Amnon Shashua’s view who, at an online conference in 2021, said that he sees a ‘great consolidation’ ahead in the autonomous car industry. The reason for this, he professed, is that autonomous vehicles are an “end-to-end system”. It is not sustainable for companies to break down the system into parts and work on each individual component. Hence, only a select few who possess the infrastructure and the capital to make self-driving systems are likely to remain. 

Who is really at fault? 

The news has led people to question whether autonomous car technology is an exercise in futility. There have been competing perspectives about who is to be blamed for the company’s failure to raise more investment. 

E.W. Niedermeyer, author and critic, took to Twitter to express his thoughts on the matter. He argues for separating “the technology” from the companies. According to Niedermeyer, the companies are going under because of the “venture capitalist bubble hubris”, and not because the scope of automation in vehicle technology is limited. He also points out that it is only Elon Musk who is explicitly propagating the impossible dream of self-driving cars while other companies are building “real driving automation solutions that deliver real economic value today”. 

Google AI’s Keerthana Gopalakrishnan, on the other hand, pins the fall of Argo AI on its business model. She says that instead of taking the leap directly towards autonomy, companies should adopt an incremental approach towards realising the dream of self-driving cars. 

There is caution exercised when it comes to self-driving cars among AI experts. This caution arises because of the complexity of the task at hand. Google’s Sumit Gupta says that difficulty is not at the level of AI and Deep Learning, but about “building a complex real-time control system doing complex sensor fusion with diverse sensors”. While many believe that Tesla is way ahead of the race, especially with several startups failing to sustain, there is still a long way before companies can even begin to think of a full fledged self-driving system. 

This can also be corroborated by the fact that recently, the US Department of Justice also launched a criminal investigation against Tesla Inc. to probe the dozens of accidents reported, some even fatal, in the presence of Tesla’s driver assistance system, ‘Autopilot’. In its defence, Tesla has said that the drivers have to agree to keep their hands on the steering wheels at all times before enabling Autopilot. However, the latest probes are examining if Tesla is “misleading consumers, investors and regulators by making unsupported claims about its driver assistance technology’s capabilities”. 

In this context, Argo AI’s shutting down carries hope for change. The VC ecosystem has been pouring money into companies establishing themselves as makers of “self-driving cars” but, as Niedermeyer also says, “automation is a spectrum”. There are levels to autonomous vehicles which differ in complexity and functionality. But, a self-driving vehicle which is generalisable, and that is truly, legally autonomous, is still a far-fetched thing—a crushing reality that the VCs are yet to accept.