Why Apple May Want the Drive.ai Team
Apple is in talks to acqui-hire the team of a well-known self-driving vehicle startup, Drive.ai, according to The Information. The company has raised $77M and was last valued around $200M. In our view, Apple is not after brand or even purely strategic value, but rather talent and intellectual property — Apple’s primary acquisition playbook.
An acquisition of Drive.ai would certainly renew the conversation around Apple’s efforts in autonomy, about which, little tangible information is known. Our most recent insight into Apple’s Project Titan was a confirmation that 200 employees working on the project had been let go or re-assigned in January of this year. Project Titan has gone through several shake-ups and changes in direction but is still an active area of focus for Apple.
Who is Drive.ai?
Drive.ai spun out of Stanford’s AI Research Lab in 2015 and has since become one of the better-known startups working toward deploying autonomous vehicles, employing more than 100 engineers. In July of 2018, the company launched a pilot program to test fixed-route autonomous shuttles in Frisco, TX.
In addition to a self-driving software stack, Drive.ai was developing a communication system that would aid the interaction between the autonomous vehicle and pedestrians, bikers, other cars, etc. — one of the major outstanding question marks in the deployment of autonomous vehicles. Drive.ai had reportedly been seeking a buyer since February of this year, hiring an investment bank to lead the process. As such, we believe the potential acquisition price would be below their last $200M valuation.
Apple & Autonomy
Despite a host of rumors, quotes from executives, and high-profile hires, the endgame for Apple’s Project Titan remains a mystery. The project has been active since 2014 and seems to have gone through several iterations, with hires and patents pointing to electric vehicle hardware, self-driving software, and general purpose autonomous systems. As of April, Apple had 69 vehicles and 110 drivers licensed to test autonomous vehicles on California roads. After cutting 200 employees from the project in January, an Apple Spokesperson said, “We continue to believe there is a huge opportunity with autonomous systems, that Apple has unique capabilities to contribute, and that this is the most ambitious machine learning project ever.”
We continue to believe there is a huge opportunity with autonomous systems, that Apple has unique capabilities to contribute, and that this is the most ambitious machine learning project ever.
Apple previously signed a deal with Volkswagen to manufacture electric T6 Transporter vans outfitted with Apple’s autonomous sensor suite to be used as self-driving shuttles for employees. Despite this partnership, we believe Apple’s primary ambitions in autonomy lie in the broad application of autonomous systems and related services. In a world of highly automated transport, Apple could act as the OS layer, enabling entertainment, payments, communication, sharing, and potentially acting as the software stack for fully autonomous driving. Their potential acquisition of Drive.ai would bring a new crop of engineering talent to aid in these efforts, but we do not expect a consumer product or service from Apple for 4+ years. Nonetheless, when Apple, a company searching for the next category-defining product, calls their efforts in autonomy “the mother of all AI projects,” and “the most ambitious machine learning project ever,” we get excited to see what will emerge.
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