His startup, Argo AI, was one of the most promising companies trying its hand at robocar technology. Software genius Bryan Salesky (43) was supposed to develop the technology for autonomous driving for two car companies, Volkswagen and ford each took a 40 percent stake in Argo AI. But the car manufacturers lost the billion-euro bet – too expensive, too slowly their dream of a robotic car was progressing. They got out last October. Salesky and his co-founder Peter Rander had failed, it was the end of Argo AI. Now Salesky and Rander are working on their comeback.
Targeting robot trucks
With a new start-up that is developing the technology for autonomous driving, the two Americans are daring to make a fresh start in the market for robotic vehicles. Once again put Salesky, who at Google led development of the first self-driving car called Firefly, and Rander, formerly in charge of Uber’s robo-unit. However, the area of application is somewhat different from Argo AI: The still nameless company could specialize in truck transport, like the agency, in addition to driving services like Argo Bloomberg
learned from insiders. Argo AI, on the other hand, had primarily developed the technology for driving services and delivery vans.
We are talking about a full-fledged company for autonomous driving. The company, which is based in Pittsburgh in the US state of Pennsylvania, is said to already employ between 40 and 50 people. Argo AI was previously based there. Also based in Pittsburgh is Ford’s semi-autonomous driving subsidiary Latitude AI. Also joining Salesky’s new team is Brett Browning, former chief technology officer at Argo AI.
Automakers and Amazon stay away
So far it is unclear which sponsors are behind Salesky’s and Rander’s plans. According to insiders, a company is investing in the start-up that is neither a car manufacturer nor a tech company Amazon acts. The online retail giant almost rescued Argo AI last year. But at that time Volkswagen prevented Amazon from entering Wolfsburg wanted to retain control of the robocar start-up
. The crash came later. The looming recession rocked almost the entire tech industry. When Ford withdrew from financing Argo, Volkswagen also decided to pull the plug. Salesky’s company with 2,000 employees was on the verge of collapse.
With its new foundation, Salesky is surprising on several levels: on the one hand because of the market environment, on the other hand with the timing.
New donors are swimming against the tide
His new financiers are swimming against the tide. They are pumping money into a technology that many other investors are currently withdrawing from. After the flop of Argo AI is the Great skepticism in the industry
that the autonomous driving business could ever become profitable. According to calculations by the consulting firm McKinsey, more than 70 billion dollars have recently flowed into its development.
Car manufacturers and investors fear that the entire capital investment could soon be burned up. Market leader Cruise, in which carmaker GM holds a majority stake, burned a good two billion dollars in 2022 alone. In recent months, some have fled shares in rivals such as aurora
, the price of which has lost around half of its value within six months.
The timing also makes you sit up and take notice. If it is actually a full-fledged start-up that develops all the technology for self-driving trucks and chauffeur services, it seems almost too late to get involved. Competitor Aurora entered the market six years ago and should be far ahead of Salesky.
More potential for heavy trucks than for taxis
Less surprising, however, is that Salesky’s new venture relies on trucks. He follows the competitors Aurora and Waymo, a subsidiary of Google mother Alphabet, which are also oriented in the direction of logistics. Waymo’s Via unit specializes in freight transport. Aurora boss Chris Urmson (47), who once led Google’s robotaxi development, is initially concentrating entirely on the truck market.
The reason: the business with self-driving trucks pays off more than the pure taxi business. Not only can it cost more in view of the higher savings, but it also promises significantly higher sales – 20 times the taxi business, as Urmson recently stated in conversation with manager magazin
explained.
The self-driving trucks also promise a faster route to market maturity because they are easier to develop. After all, they drive mostly at high speed on the freeway where pedestrians don’t get in the way.
However, the development of robot trucks still harbors many problems and consumes a lot of money. For example, Aurora boss Urmson needs new capital and is considering a sale or job cuts in order to be able to drive development forward. Waymo has already had two rounds this year laid off more than 200 employees and thus 8 percent of the workforce
, after investor Christopher Hohn (56), head of the powerful hedge fund TCI, demanded drastic cuts from Alphabet boss Sundar Pichai (50).
In the robotaxi business, the market is now concentrated on just a few players due to consolidation. In addition to Waymo, these are essentially Cruise and Zoox, a robotaxi start-up that Amazon took over in 2020.