Argo AI, an autonomous driving technology company, is shutting down operations with its parts being absorbed by its two main investors—Ford and Volkswagen (VW). 

The company employs 2,000+ employees, and all of them will receive a severance package while many of them will also be hired by either Ford or VW—the rest will receive additional compensation. Neither party has disclosed how many employees would be hired by each company and which companies will get Argo AI’s technology.

The decision to wind down the business came with the shift in focus for Ford which is now looking to develop driver assistance technologies, which the company believes to be more achievable in the near term compared to developing self-driving cars. Reportedly, Argo AI’s inability to attract new investors has also played a part in the decision. This has reportedly led VW to exit as well—which now looks to focus on its software unit “Cariad” to develop automated and autonomous driving technologies in collaboration with Bosch and the Chinese tech company Horizon Robotics in the future.

Meanwhile, the ride-hailing company Lyft that partnered with Argo AI in July 2021 to introduce at least 1,000 robotaxis in its network, also announced the discontinuation of its existing robotaxi operations with Argo AI in Miami (launched in December 2021) and Austin (September 2022).   But Lyft will continue with its autonomous ride-hailing strategy with its other autonomous tech partners, such as Motional and Waymo.

Analyst QuickTake: The closure of Argo AI marks a swift downfall for a company that once had intentions to go public via an initial public offering (IPO) this year. Furthermore, its rival Aurora Innovation is also reportedly considering strategic actions , including the sale of the company, amid worsening market conditions. Intel’s autonomous tech development unit Mobileye also went public earlier this week, but at one-third of the valuation initially targeted. These recent developments suggest that autonomous vehicles will take a while to hit their stride.