Argo AI, is Shut Down

On October 27, 2022, the L4 autonomous driving company Argo AI, which was backed by the two major car manufacturers of Ford and Volkswagen, is shut down.

Argo AI, a leader in the field of autonomous driving has received US$3.6 billion in financing and is the first to fall in the decline of the industry. Instead of layoffs or downsizing, Argo AI outright shut down.

Ford released its third-quarter financial report, officially announcing that Argo AI will cease operations, and more than 2,000 employees around the world will also be dismissed.

Highlights of Argo AI

Argo AI was founded in 2016 and is headquartered in Pittsburgh. It was co-founded by Bryan Salesky (head of Google’s self-driving car hardware) and Peter Ranger (head of Uber’s self-driving project engineering). Its main business is to develop, test, and commercialize self-driving technology.

It was the early stage of the outbreak of self-driving companies in the United States around 2016. In March 2016, General Motors spent about 1 billion US dollars to acquire Cruise, the self-driving technology start-up. Then at the end of 2016, Wyamo announced that it would spin off from Google and operate independently. With this news, its valuation broke through 100 billion. The competition for automatic driving between traditional car companies and the entire technology industry has risen sharply.

Argo AI was born with Google and Uber’s self-driving core technology. In early 2017, Ford announced that it would invest $1 billion in Argo AI, which had just been established for only three months. At that time, Argo AI had less than 12 employees.

Argo AI’s cessation of operations is another microcosm of the current predicament of the autonomous driving industry, especially those companies that had ambitions to achieve L4 and above autonomous driving are now facing the same commercialization dilemma.

SAE classification of autonomous driving

The Society of Automotive Engineers (SAE) divides autonomous driving technology into six levels L0-L5.

Level 0: The automated system issues warnings and may momentarily intervene but has no sustained vehicle control

Level 1 (“hands on”): The driver and the automated system share control of the vehicle.

Level 2 (“hands off”): The automated system takes full control of the vehicle: accelerating, braking, and steering. The driver must monitor the driving and be prepared to intervene immediately at any time if the automated system fails to respond properly.

Level 3 (“eyes off”): The driver can safely turn their attention away from the driving tasks, e.g. the driver can text or watch a film. This level of automation can be thought of as a co-driver or co-pilot that’s ready to alert the driver in an orderly fashion when swapping their turn to drive.

Level 4 (“mind off”): No driver attention is ever required for safety, e.g. the driver may safely go to sleep or leave the driver’s seat. However, self-driving is supported only in limited spatial areas (geofenced) or under special circumstances. Outside of these areas or circumstances, the vehicle must be able to safely abort the trip, e.g. slow down and park the car, if the driver does not retake control.

Level 5 (Full Automation): Under all roadway and environmental conditions that can be managed by a human driver.

In the formal SAE classification, an important transition is from SAE Level 2 to SAE Level 3 in which the human driver is no longer expected to monitor the environment continuously. At SAE 3, the human driver still has the responsibility to intervene when asked to do so by the automated system. At SAE 4 the human driver is always relieved of that responsibility and at SAE 5 the automated system will never need to ask for an intervention.

Commercialization dilemma of autonomous driving

Theoretically speaking, autonomous driving can move towards large-scale commercialization after the L4 level is realized. A current problem is that there is no subdivision standard under the L4 level. Factors such as lighting conditions and road complexity will lead to huge differences in test results. Therefore, although many automakers and technology providers have stated that they have achieved L4 autonomous driving, the L4 level that everyone calls is actually of different standards, and many of them have not reached the level of commercialization.

At present, global autopilot manufacturers mainly have two market-oriented routes. One route is the “progressive evolution” route, that is, to gradually increase the auxiliary functions of automatic driving on traditional cars, collect a large amount of real-world data through the sold cars, and finally help the transition to the stage of fully automatic driving. The representatives of this route include Tesla, NIO, etc.

The other route is to take the “one-step” route, that is, after overcoming the self-driving technology that can be applied on a large scale, produce the “new” self-driving cars that don’t need a driver and no pedals, such as Waymo, Cruise, Argo AI, etc.

From the realistic situation, these companies that pursue the “one-step” route are facing considerable challenges. In addition to the closure of Argo AI, Waymo, the industry leader, has seen its valuation drop from a maximum of US$175 billion to US$30 billion. Although Waymo has started testing in more than 20 cities, and recently launched the commercial use of unmanned taxis, it can only be regarded as a drop in the bucket, compared with Google’s huge investment of more than 10 years.

In addition, Cruise, invested by General Motors, is also progressing slowly and is still in the beta stage. In March of this year, Softbank at a sharp loss also had to withdraw from its investment in Cruise to stop losses.

The reality is that there is still a long way to go to truly realize L4 autonomous driving. In addition to the hardware and software such as computing platforms, chips, and LiDARs having to reach a considerable technical level, it also takes a long time for the implementation of unmanned driving regulation. During this period, if the project cannot generate any income, the huge cost may only be affordable by a big funder like Google.

The closure of Argo AI this time is undoubtedly an alert for Waymo, Cruise, and other car companies with dreams of L4 or even L5 autonomous driving. After all, at present, companies must first survive before they can see the day of large-scale autonomous driving.