Amazon.com Inc. emerged as a potential savior for Argo AI, the now-defunct startup backed by two of the world’s biggest automakers, before the deal fell apart because of a sputtering economy, concerns about control and flagging faith in fully autonomous driving.
The online retailer was prepared to invest several hundred million dollars into Argo last spring, according to people familiar with the matter who disclosed Amazon’s involvement for the first time. Amazon planned to use Argo’s self-driving technology to automate some of the electric delivery vans it’s buying from Rivian Automotive Inc., setting up a test fleet in multiple US cities.
Argo’s key backers — Ford Motor Co. and Volkswagen AG — were eager to attract a third partner to Argo to help shoulder the high cost of developing self-driving technology, the people said. VW’s then-Chief Executive Officer Herbert Diess even traveled to the US to meet with Amazon co-founder Jeff Bezos earlier this year to discuss the deal.
The budding relationship soured as Ford and VW grew wary that Amazon would divert Argo’s talent and attention, said the people, who asked not to be identified revealing internal deliberations. The companies also struggled to come up a governance structure for how they would share control of Argo. Additionally, the retail giant was turned off by the high cost of Argo’s technology, one of the people said.
Without Amazon on board, Argo was unable to attract other investors and bolster its credibility to eventually go public. Ford and VW last month shut down Argo, which at one time was valued at more than $7 billion.
Amazon didn’t immediately respond to a request for comment. Ford, VW and Rivian declined to comment, and Argo didn’t respond to a request for comment.
Amazon’s pullout and Argo’s sudden demise underscores the start-and-stop progress toward cars and trucks that will drive themselves.
Skepticism has been growing about the commercial viability of full self-driving cars at a time when global automakers are investing billions to shift to electric vehicles to meet increasingly stringent regulations to combat climate change. Even so, the investment community was caught off guard when Argo abruptly ran aground.
Founded by autonomy all-stars Bryan Salesky, an alum of Google’s self-driving car project now known as Waymo, and Pete Rander, a former leader of Uber Technologies Inc.’s robo-taxi unit, Argo was highly regarded for its technical skills and big-name backers.
Ford originally invested $1 billion in Argo in 2017 to get the company off the…
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