Just days before self-driving car start-up Drive.ai was set to shut down permanently, Apple (NASDAQ: AAPL) came to the rescue to acquire the struggling company. Apple was reportedly in talks to buy the company weeks ago and has now pulled the trigger. The Mac maker has been working on autonomous driving technology for years, but its ultimate goal remains shrouded in mystery.
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This video was recorded on June 28, 2019.
Dylan Lewis: Another major news item for Apple is, they went out and scooped up another company.
Evan Niu: They bought a self-driving car start-up, Drive.ai. They've actually been rumored a few weeks ago to have been in talks with this company. Drive.ai has been around for a few years. They raised almost $80 million in funding in the private markets. They're valued at around $200 million. But there have been reports recently that they've been on the ropes and struggling to survive. In fact, they were set to completely shut down literally today and lay off 90 people, according to a warn notice that they had to file with the state of California, because California requires notices for mass layoffs. Apple swoops in for the rescue. No one's reported or rumored any prices or how much they paid, but certainly nowhere near that $200 million valuation that they got a while back. If they were about to shut down, in that bad of shape, I'm sure Apple got a pretty good deal on some of the talent they're going to be picking up.
Lewis: Yeah, does this feel like an acqui-hire type of situation for you, where they're more interested in the people and the staff than some of the technology that they're working on?
Niu: That's definitely going to be a big part of it. It was started by a bunch of Stanford graduates. Apple has deep ties with Stanford. Stanford is known for being this pipeline of strong talent. But of course, they've certainly developed some technology. I think it's a little weird, there's been so much turmoil lately in Project Titan, which was Apple's self-driving car project. They laid off a bunch of people a couple of months ago, like 200 people back in January. And I think there have been some leadership changes, because Doug Field, who used to be an Apple executive, had gone to Tesla for a few years. He left Tesla and came back, and now he's in charge. He's making some changes. So there's some restructuring going on. But, just, no one's ever known exactly what they're doing.
I think it's also worth noting that in terms of technology, they've been working on this autonomous driving technology for a long time, but a lot of it also ties in very heavily with computer vision, for these cars to be able to see things and recognize things in real time and be able to process it. Computer vision, Apple uses across all sorts of stuff -- photo recognition, and augmented reality is going to be a big one going forward. So a lot of this technology is all tied together.
Lewis: Yeah. I think the application for them is a little different than some of the other self-driving car companies out there. Some of the other efforts, maybe from Tesla, even maybe GM Cruise or something like that, may be a little bit more pure-play focused on the self-driving tech. It seems like, just because of the vast hardware empire that Apple has, any lessons -- visual recognition, machine learning type of things -- all those things that go into that stuff with self-driving would be applicable to all these other devices that they have out there.
Niu: Right. We know they're doing something because people spot these Apple prototype cars out there with these lidar sensors. There's also reports that they're building these gigantic test facilities. They're definitely doing something. No one's ever known what it is or what it'll look like. We're not going to find out anytime soon.
Lewis: This acquisition will reignite our interest, though. I think we'd felt like this project was on ice for a little while. Now we can start speculating again.
Niu: Yeah, they're definitely still pushing ahead.
Dylan Lewis owns shares of Apple. Evan Niu, CFA owns shares of Apple and Tesla. The Motley Fool owns shares of and recommends Apple and Tesla. The Motley Fool has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool has a disclosure policy.