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Aurora Innovation, a developer of self-driving technology, is buying Uber ATG. Photo: courtesy of Aurora

Uber said Monday it will sell its self-driving research unit, Advanced Technologies Group (ATG), to Aurora Innovation and will invest $400 million in ATG's Silicon Valley rival.

Why it matters: Uber's decision to abandon self-driving car R&D is an acknowledgment that autonomous vehicle technology is still a long way off, with no certain payoff in sight.

  • By partnering with Aurora, and taking a stake in the company, it's keeping some chips on the table for a future robotaxi service.
  • Uber will end up owning 26% of Aurora, and CEO Dara Khosrowshahi will join Aurora's board of directors.
  • Uber ATG investors, including Toyota, DENSO and Softbank Vision Fund, and Uber employees will own 14% of Aurora.
  • The deal values Aurora at $10 billion, Axios has learned.
  • The deal is expected to close in the first quarter of 2021.

Driving the news: Under Khosrowshahi's leadership, Uber has been moving to offload unprofitable businesses to focus on its core ride-hailing and food delivery businesses.

  • As Axios scooped last week, Uber is in advanced talks to sell Uber Elevate, its flying taxi business, to Joby Aviation.

Context: Uber's self-driving efforts have been plagued with controversy for years.

  • In 2017, Waymo sued Uber for stealing trade secrets when it acquired a startup founded by a former Waymo employee, Anthony Levandowski, who was later sentenced to 18 months in prison.
  • In 2018, an Uber self-driving test vehicle struck and killed a pedestrian in Tempe, Arizona. Uber paused its development work to revamp its safety culture, and the accident sent shockwaves across the AV industry.
  • Uber turned to outside investors for ATG last year, a sign it no longer wanted to bear the full brunt of financing the unit.

Yes, but: Aurora has challenges of its own.

  • Founded by three veterans of the autonomous vehicle industry, including former Google exec Chris Urmson, Aurora has long focused on developing a full self-driving technology stack, or "driver," that can be incorporated into others' vehicles.
  • But early partnerships with companies like Hyundai, Byton and Volkswagen fizzled, and Aurora has since shifted its focus from robotaxis to long-haul trucking and commercial vehicles, including a partnership with FiatChrysler Automobiles on delivery vans.

What to watch: Aurora will continue to focus on self-driving trucks, but said its acquisition of Uber ATG will give the company new opportunities in the autonomous ride-hailing business, too — most likely with Toyota.

  • “We are aware of Aurora Innovation’s acquisition of Uber Advanced Technologies Group (ATG), and look forward to exploring automated vehicle technology collaboration opportunities with them," a Toyota spokesperson told Axios.
  • Aurora, with 600 employees, will take on "a majority" of Uber ATG's 1,200 employees.

What they're saying: "While (ATG's) advances in software, hardware, product design, and more have flown under the radar, they have made tremendous headway on many fronts," Aurora's Urmson said.

  • "They are committed to rigorous testing and have built a strong safety culture. With their technical prowess in both research and practical applications, ATG will strengthen and accelerate the first Aurora Driver applications for heavy-duty trucks while allowing us to continue and accelerate our work on light-vehicle products.

TechCrunch first reported the companies were in talks last month.

Editor's note: This story has been updated with comment from Toyota.

Go deeper

Dec 23, 2020 - Technology

Nuro gets green light for self-driving delivery service in California

Nuro now has permission to launch a commercial service using its self-driving vehicles. Photo: Nuro

Self-driving tech company Nuro says it will begin charging customers for robot delivery services early next year after obtaining a critical permit from the California Department of Motor Vehicles.

Why it matters: While many companies are allowed to test autonomous vehicles in California, Nuro is the first company to receive a permit to commercially deploy them on public streets.

Pelosi announces bid for re-election ahead of 2022 midterms

House Speaker Nancy Pelosi (D-Calif.) announced her bid for re-election Tuesday, amid a deluge of other safe-seat Democrats announcing their retirements.

Why it matters: Pelosi’s announcement follows months of speculation — despite her denials — that she was preparing to leave Congress.

Scoop: Qatar emir to visit White House on Monday

The emir of Qatar, Tamim bin Hamad Al Thani, leaves the White House after meeting President Trump in 2019. Photo: Nicholas Kamm/AFP via Getty Images

The emir of Qatar will meet with President Biden at the White House on Monday to discuss Afghanistan as well as contingency plans to provide natural gas to Europe in the event of a Russian invasion of Ukraine, Axios has learned.

Why it matters: Europe's reliance on Russia for 40% of its natural gas is undermining Biden's attempts to coordinate "massive" sanctions to be imposed from both sides of the Atlantic if Russia invades. The White House wants Qatar to help ensure European countries can enforce tough sanctions without risking an energy crisis.