Volkswagen is investing approximately $2.6 billion in Argo AI, an autonomous-vehicle development company partnered with Ford Motor Co., boosting the value of the startup to $7 billion.
This latest investment adheres to a trend of carmakers trying to get a jump on the future market of driverless cars. Argo AI will continue developing autonomous-driving technology for Ford while helping VW produce supply systems for commercial use.
Of the 2.6 billion that was invested, $1 billion was in capital funding and the rest of the investment was comprised of VW’s 200-person autonomous driving division in Munich. The autonomous driving division is valued at $1.6 billion.
Other carmakers are also engaging in strategic partnerships aimed at gaining dominant market share in the driverless car industry. General Motors and Honda Motor are partnering and investing in GM’s company called Cruise. Cruise is focused on developing an autonomous driving system. Alphabet Inc. is said to be the furthest along in developing this new technology. They are working with Fiat, Chrysler, France’s Renault and Japan’s Nissan.
VW and Ford have scheduled a news conference for Friday to provide further detail. The two automakers have partnered before in developing commercial vans and trucks. This new venture would ultimately push the development of driverless technology as other automakers work to keep up.