'Aurora, which caught Uber's self-driving tech worth 3 times its market cap... Changing the industry landscape'

2017 Google, Tesla, Uber Alumni Startup
Company Valuation Soars 4x from $2.5B to $10B

[Asia Economy Reporter Kwon Jae-hee] U.S. autonomous driving software startup Aurora has succeeded in acquiring Uber's autonomous driving division, which was once three times its own size. As Aurora replaces Uber, which was considered one of the top three autonomous driving technology players alongside Google and Tesla, it is expected to emerge as a major player in the autonomous driving field. Following the news of Uber's division acquisition, Aurora's corporate value surged fourfold from $2.5 billion to $10 billion.

According to CNBC and others on the 7th (local time), Aurora acquired Uber's autonomous driving division, Advanced Technologies Group (ATG), for $4 billion. ATG, which received investments from Toyota, Denso, and SoftBank Vision Fund, saw its corporate value soar to $7.25 billion last April. Although its value declined due to poor performance afterward, from Aurora's perspective, it has still caught a big fish larger than itself.

Aurora was founded in 2017. It initially attracted attention as it was established by key figures who led autonomous driving technology projects at Google, Tesla, and Uber. Chris Urmson was the head of autonomous driving technology at Uber and Google, Sterling Anderson led Tesla Autopilot, and Drew Bagnell was responsible for Uber's perception technology development. Currently, Aurora operates its autonomous driving business centered in Silicon Valley, Texas, and Montana. Last year, it also secured investments from Amazon and Sequoia Capital.

Aurora's move to acquire Uber ATG was aimed at building a stronger market position. ATG posted a loss of $104 million in the third quarter alone, indicating poor returns on investment. However, Aurora boldly decided to acquire it, seeing future growth potential.

With this acquisition, Aurora can strengthen its research capabilities by absorbing about 1,200 Uber employees, including researchers. Tech Explorer, a specialized media outlet, evaluated this acquisition as "to acquire employees and core technology." Aurora has strengths in autonomous driving software solutions, perception and decision-making sensor and control technologies, and backend solutions connected to cloud systems for information exchange. By acquiring Uber's strengths in artificial intelligence (AI) and machine learning technology, Aurora has further enhanced its capabilities. This technology is considered effective in improving the safety of autonomous vehicles by linking with driver monitoring systems. When driver inattentiveness is detected, warning sounds are triggered, and remote monitoring is connected via an in-vehicle tablet. Eric Meyhofer, head of Uber ATG, praised it as "AI technology far superior to other companies' autonomous vehicles." Securing partners such as Toyota and Volvo, who are testing Uber's technology, is also a significant gain.

Chris Urmson, CEO of Aurora, stated in an email to employees, "With the ATG acquisition, we have a strong team, technology, and a clear pathway to multiple markets," adding, "We are taking a leap to become a top player."

Aurora's acquisition of Uber's division is expected to signal a restructuring in the related industry. As competitors Tesla and Amazon are growing through massive investments and mergers, Aurora is also expected to reach a comparable scale. The Wall Street Journal (WSJ) evaluated, "In an industry suffering from tremendous technological setbacks, this acquisition will further strengthen Aurora's position."

Since Aurora will maintain cooperation with Uber, it is expected that securing stable sales channels will be possible as autonomous driving technology strengthens. While selling ATG, Uber is investing $400 million and Uber CEO Dara Khosrowshahi will take a board seat at Aurora. Uber will also hold a 26% stake in Aurora.

Aurora has expressed its ambition to complete autonomous driving systems for trucks first. Truck autonomous driving is known to be easier to realize technologically than passenger cars. Earlier, Aurora conducted autonomous truck driving tests in the Texas area in July.

Uber, having sold its autonomous driving division, is focusing on restructuring its business portfolio to ensure profitability. By streamlining non-core businesses, it plans to concentrate more on ride-hailing and food delivery services. Following the sale of the electric scooter and bicycle sharing business Jump in May, it is also reportedly pushing to sell its flying taxi business recently.

[Image source=Yonhap News]

This content was produced with the assistance of AI translation services.