Aug 28, 2019

CEO indictment hangs over latest startup Pronto.ai

Anthony Levandowski at the Mobile World Congress in February 2017. Photo: Andrej Sokolow/picture alliance via Getty Images

Tuesday's indictment of former Uber executive Anthony Levandowski for allegedly stealing trade secrets when he worked at Google puts his latest self-driving technology company, Pronto.ai, in a tough spot.

The big picture: The San Francisco-based startup, believed to be funded mostly by Levandowski himself, has been working on aftermarket kits to outfit heavy-duty trucks with driver-assistance technology.

  • Already facing an uphill battle against big truck manufacturers working on their own integrated systems, Pronto.ai's future seems uncertain.

Catch up quick: Levandowski, 39, was charged by federal prosecutors with 33 counts of theft and attempted theft of trade secrets from Google and its self-driving unit, Waymo.

  • Levandowski, an original member of Google's self-driving car project, allegedly stole more than 14,000 proprietary files, including designs for lidar technology, from Waymo before leaving in 2016 to start his own company, Otto.
  • Uber acquired Otto a few months later for $600 million and made Levandowski the head of its self-driving project.
  • Waymo sued Uber in February 2017, but the companies abruptly settled in the midst of trial a year later.

Levandowski was not a defendant in that case, but U.S. District Judge William Alsup referred the matter to the FBI for further criminal investigation, which resulted in Tuesday's indictment.

"All of us have the right to change jobs. None of us has the right to fill our pockets on the way out the door. Theft is not innovation."
— U.S. Attorney David Anderson

The big question is what will happen to Pronto.ai, which is only a year and a half old and has fewer than 100 employees.

  • The company moved swiftly to control the fallout, promoting chief safety officer Robbie Miller to CEO, replacing Levandowski.
  • Miller is an outspoken safety advocate who as an employee sent an infamous "whistleblower's email" to Uber leaders in 2018 warning of safety concerns just 5 days before a pedestrian was killed by an Uber self-driving test vehicle. 

In an emailed statement, Pronto.ai noted that the criminal charges filed against Levandowski "relate exclusively to lidar and do not in any way involve Pronto’s ground-breaking technology."

  • The company said it still plans to begin shipping its first product, Copilot, later this year to unnamed fleet customers.
  • Copilot is a Level 2 driver assist system that provides collision avoidance, full-stop emergency braking, lane centering and adaptive cruise control — similar to tech found in today's luxury vehicles.
  • Priced at $5,000, it is a camera- and software-based system that the company says does not rely on "hardware crutches like lidar."
  • Over time, Pronto.ai plans to add additional driver-assistance features.

Yes but: The company's chances for survival without Levandowski are unclear.

  • Amid a war for talent, competitors are likely to swoop in to try to poach employees; some already are.
  • It's possible the company could be more attractive to outside investors now that the controversial Levandowski is gone.

What to watch: There's a lot of consolidation happening in the AV space, and Pronto.ai's driver-assistance technology isn't much different from what's in the pipeline from big players like Daimler, Volvo Trucks, Paccar and Navistar. Chances are high the company gets swept up by another player.

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