Son invests another $1 billion! SoftBank continues to increase autonomous driving

SoftBank believes Stack's AI-powered technology will fundamentally transform cargo transportation and supply chains.

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The founders of Ford Motor Co. and Volkswagen AG's former self-driving division have created a new self-driving trucking startup that is said to have received more than $1 billion in investment from Japan's SoftBank Group Corp.

The new company, called Stack AV, was led by Brian Zalesky, Pete Rand and Brett Browning who used to run Ford and Volkswagen's self-driving business, Argo AI, but that business closed in 2022.

01

SoftBank provides "patient capital"

Stack AV is located in Pittsburgh, which was once home to Argo's headquarters. Zaleski said in an interview that the company has 150 employees and already has a fleet of trucks that have begun road tests.

Both Salessky and SoftBank declined to disclose details of the investments Stack received, but Matt Smith, an economic development official in Pittsburgh, said he expected SoftBank to commit "more than $1 billion" in investments that would boost the development of Robotics Row, a local tech corridor.

Stack AV reached out to SoftBank earlier this year, and Saleski noted that the Japanese tech investment giant agreed to provide "patient capital" to support the startup in commercializing its self-driving truck technology. SoftBank says it has more than $160 billion in assets under management, in areas such as artificial intelligence.

"SoftBank knows how to scale a global business," Zalesky said. SoftBank's investment has helped us tremendously in the business we run because it requires a long development process. ”

02

Driverless logistics is promising

Ford and Volkswagen invested $3.6 billion in Argo but then lost patience with the startup, shutting down the company in 2022 as sentiment over self-driving technology deteriorated. At the time, a Ford executive said it would be easier to even put a human on the moon than to hit the road with a fully autonomous car.

SoftBank also backed out of its investment in self-driving company Cruise LLC last year, selling its stake to the startup's parent company, General Motors Co., for $2.1 billion.

But driverless delivery has been a promising area for autonomous driving technology because of its repetitive routes and driving on highways. In fact, Amazon (Amazon.com Inc.) considered bailing out Argo last year, but the subsequent economic downturn forced the online retailer to cut spending.

Now, Masayoshi Son's SoftBank investment in Stack AV sees new opportunities to solve logistics and supply chain problems. During the pandemic, more consumers chose to shop online, resulting in logistics and supply chain issues.

Kentaro Matsui, head of SoftBank's new business unit, said in an email response to questions from the interview: "Stack's leaders are industry veterans, and Brian, Pete and Brett have contributed to the development of the autonomous vehicle industry. Under their leadership, supported by SoftBank's AI expertise and resources, we believe Stack's AI-driven technology will fundamentally transform cargo transportation and supply chains. ”

In an interview with Bloomberg Television, Zalesky said SoftBank provided Stack AV with the time and resources necessary to solve the "world's problems" in the supply chain and the safety issues plaguing the trucking industry.

"Solving these problems requires patient long-term capital," Zalesky said. Solving this problem must have a grand vision. ”

03

A strong transport sector is the key to a robust economy

Stack will compete with Waymo, a subsidiary of Alphabet Inc. Waymo's Via segment specializes in cargo transportation. Stack's other competitors are Aurora Innovation, also based in Pittsburgh, and TuSimple Holdings Inc., which is looking for a buyer.

Startups and seasoned tech practitioners have a hard time convincing investors that they will ultimately generate meaningful returns.

But Zalesky said he was demonstrating Stack's technology to potential customers on 18-wheeled trucks and had received good feedback. He declined to identify potential customers. While the company's current fleet uses conventional engines, the technology can be used in electric vehicles.

"We have a fleet of trucks currently undergoing road tests and we are looking for potential partners to accelerate our work," said Zalesky. We found people very interested. ”

Salessky and Rand are veterans of Alphabet and Uber Technologies Inc.'s autonomous driving division. They believe there is a strong business case for developing self-driving trucks.

"We are working on fully automated autonomous driving systems that are not limited to one lane or can only drive between one highway exit and another," Zaleski said. We have to make trucks drive anywhere to finally get them adopted. ”

Salessky declined to say when Stack would commercialize its technology. SoftBank's Kentaro Matsui also did not set a deadline for expecting a return on his investment in Stack.

"We understand that success requires significant resources, and we are committed to supporting Stack in achieving their vision," said Kentaro Matsui. ”

Allowing robots to drive trucks could solve many of the problems that exist in long-distance trucking, such as the ongoing driver shortage and serious safety issues. There are up to 500,000 crashes involving large trucks in the United States each year.

"This technology has the potential to save lives and improve supply chains, increase efficiency, improve uptime and reduce transit times for goods," Zalesky said. A strong trucking industry is an important part of a robust economy. ”

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