Uber will offload its self-driving technology division known as Uber Advanced Technology Group to Aurora, the two companies said in a joint statement Monday.
Uber will also invest $400 million in Aurora as part of the deal.
While Uber still sees self-driving cars as a key profitability pillar in the long term, outsourcing the development of the technology to a partner, in this case Aurora, will help Uber reduce costs at a time when it is still dealing with the Covid-19 coronavirus pandemic.
Uber ATG as recently as 2019 received a $1 billion investment from a consortium of Japanese firms that included Toyota and automotive supplier Denso. At the time, Uber ATG was valued at $7.5B. But the division, which in 2018 saw one of its prototypes hit and kill a pedestrian, has been burning through cash, to the tune of hundreds of millions of dollars.
Aurora self-driving car prototype
As for Aurora, the company was established in 2016 with Chris Urmson, one of the early heads of the Google Self-Driving Car Project, now Waymo, among the co-founders. Another co-founder, Sterling Anderson, was in charge of development of Tesla’s Autopilot self-driving system before he quit to join Urmson at Aurora.
While the company initially made headlines with deals with Volkswagen Group and Hyundai, things have been quiet recently and VW Group and Hyundai have since gone on to establish more substantial deals with rival self-driving technology companies Argo AI and Aptiv, respectively.
Unlike Uber, Aurora doesn't plan to offer a self-driving service. Instead the company wants to sell or license its self-driving system to other firms, initially to those in the trucking industry but eventually to those firms dealing with passenger vehicles, like Uber.
The news comes only a week after Uber announced its own acquisition of delivery service Postmates in an all-stock deal valued at around $2.65 billion. Uber is also thought to be planning to offload its Uber Elevate air transport division.