Ford is giving Google and Uber veterans $1 billion to build a self-driving car brain

The deal effectively means Ford is buying Argo and taking a majority stake in the company, though Ford is framing the deal as an investment instead of an acquisition. “From an accounting standpoint, [Argo AI] is a subsidiary,” said Ford CEO Mark Fields today at an event in San Francisco. “But in terms of how they’re operating and how we’re structuring the board, this gives them a lot of independence.” For instance, Ford and Argo plan to use equity in the startup as a recruiting incentive to lure engineers away from joining competitors.

As part of the partnership, Argo AI will help Ford develop the autonomous system for a self-driving vehicle the car company plans to put on the road by 2021. “Argo AI’s initial focus will be solely and exclusively to support Ford’s efforts to bring our autonomous vehicle to the marketplace,” Fields said. He added that a focus for Argo and Ford down the line may include licensing out the self-driving system to other companies. (Argo AI could also explore an initial public offering, if Ford’s plans to commercialize and license its software pan out.) This effort is similar to one launched by Volvo last year, in which the Swedish car maker partnered with automative safety supplier Autoliv to develop and license self-driving software.