The Argo.ai Headline That Got Buried

The Gartner Hype Curve is the lingua franca for the startup space. The stages are Technology Trigger, Peak of Inflated Expectations, Trough of Disillusionment, Slope of Enlightenment, and Plateau of Productivity. Where do Autonomous Vehicles (AV’s) stand within this framework?

It depends on who you’re talking to and what lens they’re using.

Lately, the dreaded term “trough of disillusionment” is being thrown around willy-nilly in the AV space. The trigger? Argo.ai’s shutdown. The same journalists who piled on the positive hype about automated driving a few years ago are now piling on its demise. And they’ve taken muddling the facts to a new level.

The Noise To Signal Ratio

There has been no shortage of voices shouting from the rooftops. The most damning articles rely on opinions from Anthony “self-driving cars are going nowhere” Levandowski and George “AV’s are a scam” Hotz. Both were pivotal figures in the early years of commercial autonomous vehicle development, brash pioneers with the “move fast and break things” startup mentality. Now, there are thousands of people deeply grounded in this space who have deep knowledge about what is really going on in today’s AV world. I’m surprised mainstream publications quoted these two gentlemen as if they are “the” authoritative voice. They’re entitled to an opinion, but perhaps due to their notoriety they’ve been massively re-quoted from the original articles as if they were sensei’s.

As another example of negative media assertions based on thin evidence, Crunchbase News published an article titled “Highway to Broke” which analyzed six AV startups based on Crunchbase data. Two of the examples were from several years ago when vastly different dynamics were in play; these are not relevant now. One of the examples was about truck platooning, a unique use case whose prospects can’t be used to comment on the industry overall. Only three were contemporary and all were focused on trucking.

One of the three, TuSimple, is in a category all its own in terms of self-immolation unrelated to market forces.

The only valid examples used by the article to crystal-ball today’s world – at least on the truck side – were Aurora and Kodiak. Both companies are dealing with uncertainty and funding challenges, although their CEO’s are rebutting the premature assertions of their pending demise. The jury is out on them, we’ll see what happens. Simply put, the questions raised about these two companies cannot legitimately be used to frame the entire AV space.

Part 3 of this “AV Reality Check” will focus on trucking; I’ll have much more to say on this subject.

Re-Frame: A Little Detail From The Argo Story That Changes Everything

Coverage of the Argo shutdown emphasized the cessation of development and testing of their urban self-driving fleet. Argo was aiming to get into the same game as Cruise and Waymo – a tall order and they’d gotten a late start.

Argo owners Ford and Volkswagen, based on their investments back in 2017 and 2020, respectively, shifted gears to leverage the immense know-how generated by the Argo team to pivot to advanced Advanced Driver Assistance Systems (ADAS). Nothing new there; most of the leading high-tech automotive companies stepped away from fully automated driving for personal cars a few years ago. SAE Level 3 capability, which allows drivers to fully hand over driving to the vehicle while remaining available to re-take control when requested, was introduced by Honda and Mercedes in 2021, followed by BMW and Volvo Cars this year. By pulling substantial Argo expertise internally, Ford and VW got back to their traditional market and substantially increased their ADAS competitiveness.

In his November article “Keep Calm… and Ride On: AV Technology is Hard But it’s Here to Stay,” John Bozzella, CEO of the Alliance for Automotive Innovation, called the overreaction by journalists “farcical.” Based on his review of the AV landscape, “the picture is a positive one.”

He offered an insightful opinion that can only come from an auto industry veteran, noting that the Argo move was “a shift in capital spending and fairly unremarkable in the long sweep of business and disruptive technologies – especially those that might sink or swim on government rules .”

So, what’s the most significant news about Argo? Earlier this year, in discussions with Ford and VW, Amazon was ready to invest “several hundred million dollars” in Argo, as reported by Bloomberg. Amazon wanted to leverage Argo’s self-driving chops to automate their massive fleet of electric vans now being delivered by Rivian. The deal fell apart because VW was leery of sharing control with Amazon.

Wait a minute! Let’s see if I have this straight; Argo had a suitor at the door with big bags of money and (apparently) high confidence in Argo’s technology. Organizational dynamics, not money, scuttled the deal. So, while pundits are claiming the end of AV’s is nigh, one of the biggest corporations in the world, a leader in AV development and deployment, is raring to go with expanding their AV footprint even more.

Clearly, the overarching headline about Argo’s fate and the state of AV development really should have been “Amazon Aims To Invest Hundreds of Millions In Automating Its Massive Fleet of Electric Vans.”

Doh!

Just because Amazon was thwarted by the Germans (maybe for good reason), how likely is it that they went home with their tail between their legs and just gave up? Not.

Instead, I’m certain that some very interesting discussions are well underway between Amazon and other AV developers able to support urban driving for their Rivian vans. And Amazon, like most of the other key players placing bets on AV’s, sees no need to blab about it.

Keep your powder dry, naysayers. There’s no guarantee AV’s will be a success. But as developers, customers, and investors continue to quietly work towards the desired outcome, hold your fire until you really have some substance to work with.

Disclosure: I am an Advisor to Gatik, Plus, and RRAI.

Watch this space! Part Two of this series will focus on autonomous cars and Part Three will focus on autonomous trucks.

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