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Ford Motor Co. has acquired majority ownership of an artificial-intelligence startup called Argo AI and plans to invest $1 billion in the company, the latest move in an auto-industry spending spree to develop self-driving car technology.
The investment, to be made during the next five years, is part of Ford’s efforts to develop a self-driving car by 2021. Argo is now a Ford subsidiary, but founders Bryan Salesky, a former Alphabet Inc. executive, and Peter Rander, formerly with Uber Technologies Inc., will keep equity in the startup, which they founded late last year, Ford said.
“We think automation is going to define the automobile in the next decade," Ford Chief Executive Mark Fields told reporters in San Francisco.
Auto makers and tech companies including Alphabet, Uber and Tesla Inc. are racing to develop autonomous technology. General Motors Co. last yearspent $1 billion to acquire Cruise Automation to expedite its self-driving program. And Toyota Motor Corp. has said it would spend at least $1 billion on a Silicon Valley research center to study autonomous driving and robotics.
Ford has signaled this is a transition year for the 113-year-old auto maker as it invests heavily in new technologies and efforts to move beyond making conventional cars and trucks. The company is working to roll out a self-driving vehicle in 2021 and has said that autonomous cars could account for 20% of U.S. vehicle sales by the end of the next decade.
Ford last year acquired San Francisco-based Chariot, a private shuttle service, with plans to expand the commuter service to additional metro areas.