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December 18, 2015

Toyota uses $1bn smart car fund to buy stake at AI firm

News: Company still aims for first commercial self-driving vehicles by 2020.

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Toyota is set to buy a small stake from an artificial intelligence firm to build out its vision of smart self-driving cars.

The automaker will be investing $8.2 million to buy a 3% stake in Preferred Networks (PFN), a Tokyo-headquartered natural language processing and machine learning company.

The move aims to jointly promote research and development of artificial intelligence technologies in mobility-related fields.

Toyota will receive stock in PFN through the allocation of new shares to a third party as of December 30, 2015.

The firm is planning to carry out a demonstration of distributed machine learning at CES 2016 in Las Vegas. The demonstration will showcase a concept that features a potential automotive application of PFN’s technology, where multiple vehicles learn not to collide with each other.

In November, the company announced it will be investing $1 billion over the next five years in a new robotics and AI research centre in Silicon Valley set to open in January 2016.

The manufacturer has set the goal to launch its first self driving cars on public roads by 2020. Currently, the company is testing a new automated driving vehicle, called Highway Teammate, to demonstrate the safety technology of autonomous vehicle.

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Highway Teammate is a modified Lexus GS car equipped with technologies that enable it to drive on highways from the on-ramp to the off-ramp.

As for PFN, Toyota’s investment translated into an increase on the company’s value. Earlier this year, Fanuc, an Apple supplier, invested ¥900 million for a 6% stake, valuing the venture at ¥15 billion just three months ago, according to the WSJ. This was followed by a ¥200 million payout by Nippon Telegraph & Telephone for a stake of less than 10%.

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