Detroit, Silicon Valley Collaborate on Path to Self-Driving Cars

As the race to get autonomous vehicles on the road revs up, there has been much discussion in the auto industry about who will lead the charge. Because of the new technologies involved in the development of self-driving cars, many initially assumed that Silicon Valley would take the driver’s seat instead of Detroit.

But it’s becoming increasingly clear that it will take the unique strengths of both Silicon Valley and Detroit to make self-driving cars a reality.

Manufacturing cars is no simple task, in part because of the many safety regulations governing the fabrication and operation of automobiles. Plus, there are supply chains, rigorous testing, and an infrastructure of dealerships to contend with. Silicon Valley’s “move fast and break things” culture is perhaps ill-suited to the laborious process of designing, manufacturing, and selling vehicles—Tesla notwithstanding.

Meanwhile, the combination of state-of-the-art technologies—sensors, big data, machine learning algorithms, and more—required to replace the human behind the wheel is beyond the in-house capacity of most legacy auto manufacturers.

Collaboration between these two distinct innovation industries, each with its own culture and historic expertise, looks like the way forward. Ford recently bet big on that type of collaboration when it invested $1 billion in Argo AI, a robotics and machine learning startup founded by former Uber and Google engineers. Ford says Argo will be responsible for developing the “brain” of autonomous vehicles while Ford focuses on the hardware side of production. (More on that in a minute.)

Tom Kelly, executive director of the Automation Alley business association, feels we’re at a turning point.

There has long been a battle between Detroit and Silicon Valley to lead the creation of self-driving cars, and while Silicon Valley may have the traditional auto industry beat on software innovations, Detroit knows best how to make safe, reliable, enduring hardware products that inspire high rates of customer satisfaction, he says.

“Besides Apple, there are very few successful hardware companies in Silicon Valley,” Kelly says. Where he sees a convergence between Detroit and the Bay Area—common ground where they can work together for the benefit of both—is in the development of autonomous vehicles. The auto industry’s response to incursions from Silicon Valley has helped position Michigan to be a tech hub going forward, he adds.

Automation Alley’s recently released annual industry and technology outlook highlights that we’re on the brink of a fourth industrial revolution, signaled by the convergence of physical and digital technologies that are already transforming manufacturing. However, Kelly says Michigan is at risk of a diminishing role in the development of autonomous vehicles if it doesn’t properly prepare for digitization. (Automation Alley’s digitization strategy is called Industry 4.0, which encompasses cloud computing; big data; additive manufacturing; industrial Internet of Things; cybersecurity; modeling, simulation, and visualization; autonomous robotics; and advanced materials.)

Automation Alley’s outlook report is the result of a nationwide survey, conducted last November, of senior technology and manufacturing executives to determine their knowledge of Industry 4.0 technologies and whether they are ready for the digitization of manufacturing.

The report found that 85 percent of manufacturing executives said they expect their budget for technological advancements to increase in 2017. These executives also said the top three barriers to technological advancement and digitization were cost, uncertainty about which technology supplier has the best solution, and reluctant employees.

“We’re hosting a series of ‘tech takeover’ events to educate manufacturers about all these technologies that are changing the way they do business,” Kelly says. “When I talk to manufacturers, they know it’s coming and they understand how computerization has changed the front office, but they don’t know what to focus on, how to deploy capital, and what to bet on. It’s tough.”

Kelly says the goal of the tech takeover events is to get Michigan’s technology and manufacturing industries together so they can work through challenges and remain at the forefront of autonomous vehicle development.

Ford seems to share Kelly’s view on collaboration between Detroit and Silicon Valley, as evidenced by the Argo AI investment. Argo is based in Pittsburgh, PA, and it also has engineers in Southeast Michigan and the Bay Area. The company will be responsible for developing the virtual driver system, including perception, path-planning, and decision-making software, says Ford spokesman Alan Hall.

Ford, whose engineers will work side-by-side with Argo’s, will lead the development of autonomous hardware—the actual vehicle—intended for use in mobility services, such as ride-sharing or package delivery, Hall adds. Ford will also take the lead on systems integration, manufacturing, exterior and interior design, and regulatory policy management. The collaboration is in support of Ford’s goal to have “fully autonomous vehicles for commercial applications” by 2021.

What makes this arrangement especially innovative is the sovereignty Argo will retain despite the hyper-competitive landscape of the auto industry. Argo will still be able to potentially license its technology to manufacturers in other sectors, and its employees have the option of receiving equity in Argo as part of their salary and benefits package—the norm for tech startups, but less common in the automotive world.

“Argo allows Ford to really move at the speed of a startup,” Hall says. “Because Argo is able to operate like a startup, it’ll be able to recruit aggressively for the type of talent needed, and they’ll be able to offer competitive salaries and equity opportunities.”

Argo was founded by CEO Bryan Salesky and chief operating officer Peter Rander. The pair are alumni of Carnegie Mellon’s National Robotics Engineering Center and formerly led the self-driving car teams at Google and Uber, respectively. Hall says Ford already has 30 fully autonomous test vehicles on the road in Michigan, California, and Arizona.

Sarah Schmid Stevenson is the Custom Content Editor for Xconomy Insight. You can reach her at sschmid@xconomy.com. Follow @Xconomy

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