Twenty years ago, tech-savvy aspiring enterpreneurs joined a dot-com. Now, developers, programmers, and engineers gravitate to mobile apps and social media companies.
But given the latest round of big-buck acquisitions, self-driving car technology could be the latest gold rush for ambitious and talented geeks. Auto makers and tech firms like Uber and Apple are seeking to supercharge their autonomous tech via acquisitions and talent poaching.
The opening salvo in this cash-fueled competition was GM’s acquisition last year of Cruise Automation for a cool $1 billion. And just last week Ford made a $1 billion investment in artificial intelligence startup Argo AI to develop a software for fully autonomous ride-sharing vehicles it plans to have on roads by 2021.
“The next decade will be defined by the automation of the automobile,” Ford president and CEO Mark Fields said in a statement. “As Ford expands to be an auto and a mobility company, we believe that investing in Argo AI will create significant value … by strengthening Ford’s leadership in bringing self-driving vehicles to market in the near term and by creating technology that could be licensed to others in the future.”
While Ford’s move could be viewed as a competitive response to GM’s Cruise acquisition and Toyota’s equally significant investment in AI research over the last year or so, the fact that Argo AI has only been in business since November 2016 only adds to the feeling of a feeding frenzy. Ford forked over a huge sum for a company that’s barely three months, and while that’s an exception, the financial jockeying among self-driving car competitors to acquire startups is quickly becoming the rule.
Autonomous Tech Prospectors
These huge financial incentives have caused people involved with self-driving car technology—and particularly those on Google’s pioneering self-driving car team—to strike out on their own as autonomous tech prospectors.
Bloomberg notes that Google’s “staff departures from the car division increased in 2016,” and speculates that the company’s best and brightest autonomous vehicle engineers “were frustrated with the pace of progress … while others wanted to start their own autonomous vehicle companies.”
The article adds that recent “big payouts exacerbated the situation because team members had less financial incentive to stay.” One of Argo AI’s founders, Bryan Salesky, was formerly part of the self-driving car crew at Google, and a group of the company’s autonomous vehicle engineers left the mothership last year to launch Otto, a self-driving truck startup that was quickly scooped up by Uber for $680 million.
The former leader of Google’s self-driving car project, Chris Urmson, also bailed last year to form start a new company called Aurora Innovation with Sterling Anderson, who headed Tesla’s Autopilot team. And two engineers on Google’s self-driving car team left at the same time as Urmson and created a company called Nuro.ai.
Tesla acknowledged this pathway to a big payday in a recent lawsuit filed against Urmson and Anderson for allegedly pilfering the auto maker’s intellectual property and taking it to Aurora. “In their zeal to play catch-up, traditional automakers have … created a get-rich-quick environment,” the lawsuit reads.
“Small teams of programmers with little more than demoware have been bought for as much as a billion dollars,” the lawsuit adds. “Anderson and his business partners … decided to take a run at a similar fortune.”
Such large investments in companies that are just months old are reminiscent of the crazy, cash-fueled dot-com days, and have some speculating that we’re at the beginning of a self-driving tech bubble. Which is even more reason for talented geeks in the space to cash in while they can.