Apple’s iCar

Apple acquires Drive.ai

Image source: Drive.ai, Laura Hutton - Shutterstock

What's going on?

Apple announced its secretly priced purchase of autonomous vehicle startup Drive.ai late on Tuesday – and investors steered its stock a little higher on Wednesday.

What does this mean?

Drive.ai was founded in 2015 and raised $77 million from venture capital investors two years later, valuing it at $200 million. But the wheels fell off as the company ramped up tests of artificial intelligence to replace human drivers. In fact, Drive.ai planned to shut down altogether this week… until Apple came along.


Apple’s acquisition of Drive.ai was likely an “acquihire”. Rather than focusing on the company’s products and patents, Apple was perhaps more interested in bringing Drive.ai’s remaining staff along for the ride (tweet this). They’ll likely join the 1,000-strong team already working on Apple’s own mysterious autonomous vehicle project.

Why should I care?

For markets: First the land grab, then the shakeout.


Several companies seem excited about the potential of autonomous vehicle technology: investment bank Goldman Sachs estimates self-driving cars could help the $110 billion ride-hailing market double in size by 2030. This would benefit Lyft and Uber – which on Tuesday announced its own acquisition to help fuel its autonomous ambitions. And carmakers are grabbing a seat too: Renault and Nissan have teamed up with Google’s Waymo, while Tesla and Ford have their own major autonomous plans. When a new industry matures, competition typically shakes out those who aren’t keeping pace.



For you personally: Be long-term greedy.


Worth $900 billion, and with $245 billion in cash, Apple represents some 4% of the total US stock market. It’s a favorite among millennials and held – albeit indirectly – by many other investors whose cash is parked with globally diversified robo-advisors. In the immediate future, investors will probably focus on the 20% of Apple’s suppliers caught in the trade war crossfire. But if self-driving cars become a big part of Apple’s business – like highly profitable services have – it may boost the stock long-term.

Originally posted as part of the Finimize daily email.

The top 2 financial news stories in 3 minutes. Join over 600,000 Finimizers

Read next

AbbVie Buys Class A

Sign up to Finimize

Get the two most important global financial news stories each day. Sent at midnight UK time.

Get started with one email a day

The top financial news stories in 3 minutes.