No more caution flags with autonomous vehicle M&A

Contact: Mark Fontecchio,

Autonomous vehicle (AV) targets are in the driver’s seat again, this time with Ford Motor’s majority acquisition of software firm Argo AI through a five-year, $1bn investment. The finish line for Ford is 2021, when it aims to roll out a fully autonomous vehicle. To get there, Ford plans to combine its existing self-driving tech with Argo’s artificial intelligence (AI) and robotics software.

Before 2016, Ford had only made one tech purchase in the previous decade, for software to connect smartphones with in-car entertainment. Then last year – a year when tech vendors including Google and Uber were already testing self-driving cars on the roads of Pittsburgh and elsewhere – Ford awoke, buying computer vision and machine-learning software firm SAIPS. That deal followed similar moves by its peers in 2016, as Toyota nabbed Jaybridge Robotics and General Motors paid $581m for self-driving navigation systems provider Cruise Automation.

Auto manufacturers are far from the only companies – or even the only non-tech companies – inking transactions in this space. We are also seeing activity from automotive parts suppliers like Continental AG and Delphi, both of which made an AV acquisition in the past two years, as well as tech vendors such as Google, Uber, Intel, HARMAN and TomTom, the last of which purchased a company in the sector called Autonomos just last month. According to 451 Research’s M&A KnowledgeBase, there have been 20 acquisitions of AV tech since the start of last year, compared with just six in the four years before that.

We highlight AI and machine learning in our 2017 Tech M&A Outlook for application software, as we predict that companies will buy technology and expertise in this area. Subscribers to 451 Research’s Market Insight Service can also access our report on M&A trends and predictions in AI and machine learning.

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