Uber abandoned its efforts to develop a self-driving taxi on its own, writing down its investment in the technology by over $5 billion.
The company said it will merge its Advanced Technologies Group with autonomous driving startup Aurora, along with $400 million in cash, in a deal that will give Uber a 26% stake in a group valued at $10 billion. The implicit $2.2 billion valuation for ATG compares with a valuation of $7.25 billion that Uber had put on it last year when it raised private funding from Japanese investors Toyota, Softbank (OTC:SFTBY) and Denso.
CEO Dara Khosrowshahi said the deal, which represents the latest disposal of a money-losing side business for Uber, would accelerate its path to profitability. ATG, along with other technology programs, had contributed around $104 million to a pretax loss of over $1 billion in the third quarter.