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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.

Elise Stefanik elected No. 3 House Republican after Liz Cheney ouster

Rep. Elise Stefanik (R-NY) on May 12. Photo: Mandel Ngan/AFP via Getty Images

House Republicans voted 134-46 in a secret ballot Friday to appoint Rep. Elise Stefanik (R-N.Y.) as the chair of the GOP conference, replacing Rep. Liz Cheney (R-Wyo.).

Why it matters: Stefanik's appointment underscores how important loyalty to former President Trump remains to the Republican Party.

Retail sales flat in April after huge surge in March

Illustration: Aïda Amer/Axios

April retail sales in the U.S. were unchanged from March, which saw a surge revised up to 10.7%, according to the latest Commerce Department report published Friday.

Why it matters: The U.S. has been entering a period of growing optimism in the wake of the vaccine rollout, falling new COVID-19 cases and deaths, and a slowly recovering labor market. Retail sales were up 51% year-over-year compared to April 2020.