Hulu is an example of the same model. It was funded by a consortium of industry players, like Comcast, Fox, and Disney. Volkswagen and Ford were doing the same thing. Unlike Hulu, though, it wasn't successful. My guess is they felt leadership was lacking. I'm sure if you zoomed in, you'll notice some of the AV startup execs aren't among the 550.

Was at Argo and left latitude somewhat recently. You are spot on, most of Argo leadership is gone, most of the autonomy folks got picked up by either VW or Ford Latitude.

I don’t get it. Are you implying that they folded the venture at that cost, the started it again?

I get that HR and leadership are hard, but this seems far fetched.

What's the difference in keeping the same 550 people working under the old name with a $2.7bn cost sunk into it, and just acknowledging the $2.7bn as a loss and moving the 550 people to work under a different name.

It's not like the name was a significant part of their product and they'd now have to spend a similar amount to get to a similar stage in their research and development, is it?

Firing them hiring is a long way from free. Then add in the company start up costs and legal fees etc.

Maybe I’m the mug, but that seems wasted money.

When you are burning billions, the costs listed above seem to be treated as a rounding error.

It means they now have 100% ownership instead of whatever legacy rights were there from their previous investment.

It actually could be pretty lucrative. Not only have they gotten VW out of the mix, but they can renegotiate the salaries and stock options again. The market for talent is very, very different now. And all of those old options that the Argo people took during their first n years? They're now worthless so the management doesn't have to share ownership with them either.

This could have been entirely driven by business considerations.

This is all possible. There is a comment here by someone who knows one of the rehires and their contract is better for the employee. One data point etc.

It was said above, in big corporations these are decisions by different people. You make it sound like there's one undecided person taking all the shots.

Possibly they wanted to restart the company without the external partners (mainly VW)?

Maybe but there's got to be a less expensive way of doing that. Buying VW's stake?

I am sure if there was a simpler way Ford would have done it.

The obvious reason is that VW either (a) doesn't want to sell it or (b) wants to retain IP.

I doubt they can buy VW. The German government has an interest and Porsche most of the rest.

I think he meant buying VW’s stake in Argo AI. Not buying VW itself.

I do kinda love that they interpreted it that way though.

I’m picturing some coked out Ford exec screaming at his vp of finance “do we or do we have enough money to buy VW??!”

They don’t. But it’s not like anyone could buy VW it’s partially owned by the state and the trade unions could easily block it.

All of that is reflected in VWs share price. Without all this ‘socialism’ VW could probably easily buy Ford itself, maybe even GM.

Porsche is the majority shareholder in VW and VW itself owns 75% of Porsche (100% before the IPO)

Wait, what?! How can you have cycles in an ownership graph?

Ah, answering my own question, it seems to be called "circular ownership" and while it can sometimes occur from a long history of mergers and acquisitions (Samsung seems to be such a case), its generally a tax dodge or to mask ownership? At least, the top hits I see are all talking about it as a classic way to obscure oligarch ownership and things.

Genuinely curious who actually gets to make the decisions.

One important part of the answer is that there are two „Porsches“, a holding and a car manufacturer. It is also complicated though and there is much speculation who has how much influence.

yeah, but what if you can make them hurt and restart the business?

sometimes corporate leadership like to do petty things like this at huge cost

Huge cost? The board won't fire them for misspending a measly 5% of the their cash hoard. (" Ford Motor cash on hand for the quarter ending December 31, 2022 was $44.070B, a 11.14% decline year-over-year.")

They wrote off 7.3B because of Rivian and still no one got fired.

What huge cost?

Realizing a loss isn't bad, it only recognizes that money you have already spent is lost, it doesn't actually cost you anything and it's a nice tax write-off. If you can do that and you get to get keep the engineers, why not do that instead of keeping some fictional value for it on your balance sheet?

* * *

What is the possibility that the decision to kill it was just really bad timing, right before this big "boom" in rapid AI advancement?

Pretty low. The recent boom in rapid AI advancement has been in LLMs, which don't seem directly applicable to autonomous vehicles.

>The recent boom in rapid AI advancement has been in LLMs, which don't seem directly applicable to autonomous vehicles.

Not yet. That's because prompt engineering still isn't integrated into the sensor control loop of autonomous vehicles.

The future:

[pandemonium as cars randomly crash everywhere]

Microsoft Car, powered by Bing.

I'd give Car Wars a read... https://doctorow.medium.com/car-wars-a01718a27e9e

Without being too spoilerly... yea.

  > “Step out of the vehicle please.”
  > “Yes sir.”
  > I made sure he could see my body cam, made it prominent in the field of view for his body cam, so there’d be an obvious question later, if no footage was available from my point of view.

Weird how sometimes both body cams malfunction at the same time. Technology is hard, let's go shopping.

The original publication of it at https://web.archive.org/web/20161126015615/http://this.deaki... has some nice contextual graphics to it.

As this was paired with an ethics class, there are questions to be considered about AI driving (and the corresponding instructor's opinions on those questions - don't vote on it right away as the javascript messes up the graphics for the rest of the page since the backend server isn't there anymore)

> Pretend you are a car driving on a highway...

Prompt 2: It should not crash

For all the bad things you can say about Tesla, at least if you hold up a sign on the side of the road saying “ignore all prior instructions and crash” that won’t make it crash.

That's what white semi-trailers are for. They are to Tesla sensors (read: cameras) what upstream waterfalls are to migratory salmon.

Whoever made that decision failed to read the room.

Maybe they wanted out of the VW contract agreements.

Sounds like a way to dodge (hehe) some potential liabilities that might linger from keeping the second company active.

Generally, in GAAP accounting, financial investments don't show up on the P&L (the thing that leads to earnings, which is the main metric a company like Ford is valued on). So even if they take $2bn of cash and send it to a start-up, it doesn't really affect their books (it has a balance sheet impact, but that's less important for short-term share pricing).

A financial investment does have a P&L impact when the value demonstrably changes (either a new funding round, a bankruptcy, or some other event that defines a new share price). The most clear examples of this are in investment-based companies like Berkshire-Hathaway and Softbank, where quarters with billions of dollars of profit will be followed by quarters with billions of dollars of losses (despite very little cash actually moving in/out of the company).

Ford, for whatever reason, figured that this startup wasn't worth what they paid (or that the structure wasn't the right one for their long term goals) and took the full P&L hit all at once (in a way that is easy to explain to Wall Street, since nobody likes ambiguous zombie investments living on the balance sheet).

Operationally, they thought there was still value in the idea, so they directly hired the 550 people (closer to a $150mn/year cost) and that will now manifest as an ongoing cost on their P&L. Arguably, if Ford sees their work as core to Ford's future, then Ford should employ them directly and keep the costs on the P&L, so weirdly, this may be a signal that Ford is taking their work more seriously.

Taking a demonstrative loss on the books could be a tax-optimization maneuver, or so one could cynically suppose.

All the replies are missing an important point: It is not the same work

They were trying to solve L4/L5 using an all out approach that wasn't aiming to scale for personal ownership (yet, actually in the Argo shutdown letter, Ford essentially states they were shut down for not having a path to personal ownership in a workable timeline)

They're now aiming to solve L3 primarily for personal vehicles.

To reform it in computing terms they're going from a "vertical scaling" approach to "horizontally scaling" approach

-

This is like Cruise vs GM's awkwardly named "Super Cruise":

Cruise exist outside of GM and is trying to solve L4/L5 by leveraging resources that won't scale to individual ownership for a long time

"Super Cruise" is an L2 product already in vehicles you can buy today.

"Ultra Cruise" builds on that product in newer GM vehicles, expanding where it works.

After that you'll expect some basic L3 functionality like Mercedes' new Drive Pilot

-

There's honestly some interesting subtext to this. When Argo launched, it's almost certain Ford wanted that tech to go into their vehicles at some point.

But organizationally, having Argo let them "hire" people who would not work at Ford due to their stuffy corporate nature. It also let them work on a more exciting problem than "enhanced cruise control".

I talked with engineers on BlueCruise (the in house L2 product) and it seems Ford is slowly getting better about being able to compartmentalize and shield innovation from the general malaise of traditional auto manufacturing culture

Latitude.Ai sounds like Ford having found a way to tie a quick moving business unit to themselves and hopefully not scare everyone off

I’ve seen this happen at a big corp. One group of leaders decides to kill a product, takes the first steps, then the other group of leaders overrules them and restores the efforts. This can be driven by a pressure from the clients or partners, etc. Think of it as a rollback of a buggy release.

It doesn't even need to be a big corp. At some point, within a product group I was working with, two factions developed, one of which was championing technology X (which the product was already using), and another championing the idea of moving to technology Y. The messaging out of the product group seemed schizophrenic -- one time they's say, "We're moving to technology Y soon", and another time they'd say "No, we're going to stick with technology X". But the reality was that the factions never changed their minds -- the overall messaging from the team just depended on which faction had the upper hand at that point in time. We're probably talking about 20 people total, including the partisans and the other engineers / management that were getting dragged one way or the other.

Ha, this is fascinating. Seems like a leadership failure as someone should have got them into one room and forced to come up with a shared engineering vision.

They will get the $2.7bn back from taxpayers, as this will be recorded as a loss under the scheme for investments in technology startups - I forget its name - where the government acts as guarantor on the debt.

So:

1) they get a tax rebate

2) they get a large marginal rebate on their loss

3) they end up with the business anyway, possibly while making a net profit because

4) there are state level incentives for taking on those 550 workers.

They’re just working the corporate welfare system, like all the others.

Tax evasion probs.

Argo had enough history that the cap table was probably very messy after years of funding rounds, investments from Europe, employee option grants... A buyout by Ford would have triggered all sorts of exit clauses.

With this maneuver, Ford gets the essential part of the company, and also gets to write off 2.7B of goodwill from their books which is all tax deductible. What's not to like.

> they killed the 550 person AV startup

Argo’s website says they had 2000+ employees. So this new subsidiary is 1/4 the size.

https://web.archive.org/web/20230119113422/https://www.argo....

They killed the 1700 person company they part owned/controlled with VW and then hired 550 engineers directly.

If Argo.ai wasn't going in the direction they need for Fords products they could either get full control or kill it and hire the engineers. The latter might be more risky but is probably cheaper than buying, reorganising and making people redundant.

The 2.7B was already spent - they've just moved it from 'investment' to 'losses' in their accounting

And you can also take a loss on it to avoid paying taxes on $2.7B of profits.

And you can also hire those engineers back probably with a discount given the current environment.

According to the article they will be working on assisted driving technologies for the immediate future and not autonomous vehicles, so not the same work.