Ford And Volkswagen Folded Argo AI After Failing To Reach Deal With Amazon

Amazon.com Inc AMZN ditched its plan to invest in Argo AI, Bloomberg reports. Argo is a start-up backed by Ford Motor Co F and Volkswagen AG VWAGY.
Amazon initially planned to use Argo’s self-driving technology to automate some of the electric delivery vans it’s buying from Rivian Automotive, Inc RIVN, setting up a test fleet in multiple U.S. cities.
Also Read: Amazon Weighs Paring Back On Unprofitable Businesses Like Alexa; Introduces New Warehouse Robot To Cut Down On Lag
Ford and VW were eager to attract a third partner to Argo to help shoulder the high cost of developing self-driving technology.
The budding relationship soured as Ford and VW grew wary that Amazon would divert Argo’s talent and attention.
The companies also struggled to develop a governance structure to share control of Argo.
Additionally, the high cost of Argo’s technology was a reason for Amazon’s back-off.
At Amazon, the mergers and acquisitions executive championing the deal and working directly with Argo left. Around the same time, Dave Clark, CEO of Amazon’s consumer business, also exited.
VW CEO Herbert Diess, architect of the automaker’s investment in Argo and a driver of the Amazon deal, was ousted by the board amid concerns about the company’s direction and a debacle with glitchy software in its cars.
Without Amazon, Argo failed to attract other investors and bolster its credibility for public listing.
Ford and VW last month shut down Argo, which at one time was worth over $7 billion.
With the Amazon deal dead, Argo had to lay off the 150 employees it hired to work on the new business.
VW looked at covering Ford’s investment in Argo and taking it over completely. Instead, VW invested $2.3 billion to set up an autonomous driving joint venture with China’s Horizon Robotics Inc.

Market News and Data brought to you by Benzinga APIs

Comments

Popular Channels

Tools & Features

Partners & Contributors

About Benzinga