But now automakers see the fabulous potential in driverless cars to reshape the industry. Ford just bought an AI firm for $1 billion. They seem to be vertically integrating into this technology as fast as they can by acquiring the firms that are producing these components.
In the last several months, Ford acquired Chariot, a start-up that ferries commuters around the San Francisco area, and invested in Civil Maps, which is developing 3-D mapping technology that can be used by self-driving cars. In August, Ford also acquired SAIPS, an Israeli company developing machine learning and computer-vision technology.and
Other automakers are moving in the same direction. General Motors has invested $500 million in Lyft, a ride-hailing service and main rival of Uber. G.M. also acquired Cruise Automation, a maker of sensors and other gear that can enable conventional automobiles to drive themselves on highways.
Why the reversal on vertical disintegration?
Possibly for quality assurance reasons. Driverless cars rely on computers and software that comes from an industry notorious for rushing new products out the door, sometimes before all the kinks are worked out. But getting the PC’s “blue screen of death” at 80 mph might become a bit too literal. If the software in your Ford failed, you would sue Ford, not its supplier. Knowing this, its supplier might not do all the safety checks Ford might want. A solution, make them part of Ford.