Uber’s (NYSE:UBER) self-driving unit, Advanced Technologies Group (ATG), is being acquired by start-up competitor Aurora Innovation.
The deal, expected to close in the first quarter of 2021, values ATG at $4 billion. The unit was valued at $7.25 billion in April 2019 when Softbank, Denso and Toyota took a stake in ATG.
Uber CEO Dara Khosrowshahi will join the company’s board of directors, and the ride-sharing giant will invest $400 million into the company.
Overall, Uber and ATG investors and employees are expected to own a 40% stake in Aurora, according to a regulatory filing accompanying the deal. Uber alone will hold a 26% stake.
Aurora is backed by Hyundai, Amazon and major venture firms such as Greylock and Sequoia. Media reports first emerged in November that the two companies were in talks for ATG.
Uber’s co-founder and former Chief Executive Officer, Travis Kalanick, had viewed self-driving cars as an essential investment, saying in 2016 he believed the world would shift to autonomous vehicles.
However, the ATG self-driving vehicle unit brought high costs and safety challenges to Uber. Throughout 2020, Uber has made efforts to stem losses in its ride hailing business, control business costs -- including with major layoffs in the spring -- and grow its delivery business.
