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Apple's Self-Driving Technology Project Might Get A Boost With Drive.ai's Acquisition

FreightWaves

Apple Inc. (NASDAQ: AAPL), in an attempt to scale up its autonomous driving division, is looking to acqui-hire self-driving startup Drive.ai, which will see dozens of engineers from the startup joining Apple. Acqui-hiring, is the process of absorbing a company, predominantly for the expertise of the people involved in it, rather than about buying a company for its services or products.

Beleaguered company Drive.ai, has been in rough waters for a few months, fighting hard to stay afloat in a high-stakes game that forces self-driving companies to invest heavily in development and test runs to remain relevant in the vertical. Drive.ai, valued at around $200 million at the start of 2019, has found it hard to raise enough investment to put up a fight before cash-rich companies like Google-spinoff Waymo, Uber, Tesla, or General Motors.

Vehicle automation has matured to a stage where the market leaders now burn through over a billion dollars every year in perfecting their technology and in running tests across public roads. Waymo, for instance, has been developing the technology for nearly a decade, and has run SAE Level 4 driverless cars on public roads for four years now. Since 2017, Waymo has also allowed members from its early rider program to take rides on its self-driving cars in the Phoenix area.

Earlier this week, FreightWaves had reported on how the lines separating software providers and original equipment manufacturers (OEMs) are fading in the pursuit of self-driving technology, which requires an all-hands-on-deck approach to achieve the goal of SAE Level 5 automation. Consolidation of companies is an essential part of the process, as it will avoid redundancy in technology development and help focus collective energies into working on singular issues that delay adoption.

That said, consolidation within the autonomous driving industry is not new. In 2016, General Motors bought self-driving technology firm Cruise Automation to bolster its efforts in the segment. NuTonomy, an MIT self-driving technology spinoff, was acquired by Delphi Automotive in 2017. Drive.ai has been looking for a potential buyer since February 2019, with it hiring investment bank Jefferies to act as its advisor in the runup to possible negotiations.

When Drive.ai started out, it was considered to be one of the pioneers in deep learning technology, which helps the vehicle intuitively recognize and avoid obstacles on the road. However, this is no longer its unique selling proposition, as all its competitors have been quick on the uptake, incorporating it into their solutions as well.

Nonetheless, Drive.ai has not recorded enough miles of testing on public roads like its competitors. The company announced in a regulatory filing earlier this year that its self-driving vehicles have collectively driven around 8,000 miles across select routes within a geofenced area in the cities of Arlington and Frisco in Texas.

Then again, as reported by The Information, Apple's primary target looks to be the people who make up Drive.ai, including directors like Andrew Ng, a world-renowned expert in artificial intelligence and a professor at Stanford University. As of February, Drive.ai had over 100 engineers in its payroll.

Apple has also been actively looking to create a footprint within the autonomous driving vertical, with it initiating Project Titan project for driverless electric cars and employing over 5,000 people in its research and development.

However, Titan has been mired with issues, as Apple laid off employees, shifted a few of them to different projects, and even changed the project's focus several times over the years. One can hope that acqui-hiring Drive.ai's employees might give Apple more clarity into the self-driving segment, and help it gain ground against its larger competitors in the market.

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