Argo AI, the self-driving startup backed by Ford and Volkswagen, is shutting down, The Verge has learned. Employees were notified that an announcement would be made late in the day Wednesday. (The news was first reported by TechCrunch.)
The company, which was founded by veterans of Google and Uber’s self-driving car projects, has lost the financial support of Ford and VW, a source said. And according to TechCrunch, the company’s resources will be absorbed by both automakers. Argo is estimated to have around 2,000 employees, though it did announce a round of layoffs earlier this year. A spokesperson for Argo declined to comment.
Argo had laid off some employees earlier this year
Ford has long touted Argo’s progress as crucial to the automaker’s overarching plans to launch a commercial robotaxi service. Earlier this year, Ford CEO Jim Farley congratulated Argo for removing safety drivers from its vehicles in Austin and Miami, two of the cities where the company tests its vehicles.
“Congratulations to our partners Argo AI!” Farley wrote in a LinkedIn post. “As we work to build and scale a fully autonomous commercial service, this milestone from Argo is a significant step forward in their technology development and the future of transportation!”
Several months later, when it was reported that Argo was laying off about 150 employees, a spokesperson called the company a “critical partner of our self-driving service, and we will continue to support them and work together on developing the self-driving technology that will power our self-driving service.”
But cracks were starting to show in these multibillion-dollar companies. Argo’s main rivals, Waymo and Cruise, had major leadership shake-ups. Valuations have dropped as timelines have stretched further and further out. Companies that went public by SPAC have seen their share price tumble. The costs have grown while revenues trickle in.
Argo came very close to merging with a SPAC, which stands for special acquisition company, even going so far as to choose JP Morgan Chase and Morgan Stanley to manage its most recent funding round. The company was said to be going public with a $7 billion valuation.
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