Many businesses are considering different plans to make automotive artificial intelligence profitable.

The founders of Argo AI – along with automaker partners Ford Motor Company and Volkswagen AG - believe their plan will work. It is different from those of some of their more highly valued rivals.

Argo AI wants to get customers that will use robot vehicles for many purposes, including transporting goods and people.

Background and business plan

Bryan Salesky, the leader of Argo AI, started developing automated vehicles 12 years ago, in a competition.

The self-driving systems developer is now at the center of a multibillion-dollar investment. Argo AI and its partners think that self-driving vehicle technology must be good for more than just replacing taxi drivers.

“I hate the word robotaxi,” Salesky said in a rare interview at Argo’s Pittsburgh headquarters. “There are so many applications and businesses to be built.”

A profit-sharing deal is at the heart of The Argo business plan. Ford and VW will pay Argo fees based on the distance traveled by vehicles equipped with Argo’s technology. Details of that deal have not been reported until now, notes the Reuters news agency.

Among the possible uses of Argo’s technology: Long-distance trucking for e-commerce.

Argo’s plan is to provide self-driving systems that Ford will launch in late 2021 in three U.S. cities.

VW leaders told Reuters they expect to follow in 2022 or 2023 with a VW-designed all-electric vehicle.

Competition

Some rivals are not persuaded that Argo has any lead.

Glen De Vos is chief technology officer of Aptiv, which recently bought self-driving startups nuTonomy and Ottomatika.

He noted Aptiv’s partnership with the ride-sharing company Lyft. He said the companies are testing self-driving vehicles, and added that Argo “doesn’t have the component engineering capability that Aptiv has.”

Investors so far see less value in Argo than companies whose work centers on robotaxis. For example, the company Waymo is valued at $105 billion. Another, Cruise, is valued at $19 billion.

Argo’s value is estimated at $7.25 billion following Volkswagen’s $1.9 billion investment.

I’m John Russell.

Paul Lienert and Ben Klayman reported on this story for Reuters. John Russell adapted her story for Learning English. Caty Weaver was the editor.

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Words in This Story

application – n. the use of an idea, method, law, etc., in a particular situation or for a particular purpose

component – n. one of the parts of something (such as a system or mixture): an important piece of something

e-commerce -- n. activities that relate to the buying and selling of goods and services over the Internet​