Xiaodi Hou, the cofounder and CTO behind the failed startup TuSimple, is making another attempt to master robotic trucking. His new company just raised $20 million from venture investors and aims to launch commercial operations next year.
Houston-based Bot Auto plans to operate autonomous semis on highway routes in Texas, hauling freight between warehouses and logistics facilities in Houston and San Antonio. Unlike San Diego-based TuSimple, which delisted shares early this year after a major implosion, the new company will own and operate its trucks directly rather than provide autonomous cargo-hauling technology as a service, Hou said. Initial loads will be carried in trucks equipped with laser lidar, radar and cameras with human backup drivers. Hou declined to say when fully autonomous deliveries will begin.
“The time has come for companies to rethink the best way to deliver [autonomous] technology,” Hou told Forbes. “TuSimple was born in the first wave of deep learning, and now we have the second wave of deep learning and new technology that should be adopted. Also, it’s a new structure of organization. We are a much smaller company, a much more efficient operation, using newer technology, but still trying to aim for the same holy grail of autonomous driving.”
That goal also means being able to operate trucks in fully autonomous mode at a cost matching that of human drivers of about $2.50 per mile, according to Hou. The appeal of robotic trucking is that it could address a persistent shortage of human drivers.
But it’s a gamble for Hou, a Caltech-trained computer scientist. Up until early 2022, TuSimple seemed to be on a fast track to commercializing robotic trucking ahead of bigger rivals including Waymo and Aurora. It lined up shipping agreements from major customers and announced development plans with some of the biggest truck builders, aiming to offer cargo runs with no human at the wheel by late 2023. But shortly after its $1.4 billion IPO in early 2021, circumstances deteriorated rapidly. A 2022 accident in which a TuSimple truck crashed into a highway divider rocked the company’s image. A review of the incident concluded last year when the National Highway and Traffic Safety Administration opted not to launch a formal investigation.
But sharp disagreements over business strategy between Hou, the company’s board and (former and current) CEO Cheng Lu exacerbated its problems. TuSimple’s ties to Hydron, a separate China-based truck company created by cofounder Mo Chen, also triggered a federal investigation by the Committee on Foreign Investment in the U.S., or CFIUS review, over concerns about technology being shared with a Chinese company. Hou was fired as CEO by TuSimple’s board of directors in late 2022, in part related to his alleged ties to Hydron — which Hou has always denied. The turmoil led to its operations grinding to a halt last year. Last month, TuSimple settled a lawsuit brought by shareholders for $189 million that accused the company of defrauding them by overstating its safety record and concealing the founders and executives’ ties to Hydron. Hou, Chen and Lu all denied any wrongdoing.
In addition to the technical challenge of what Bot Auto hopes to accomplished, the new company could face at least one additional hurdle.
Most of the 40 people working for Hou at his startup are former TuSimple engineers. Though he says the software they’re developing is entirely new and not based on any of the work done at the previous company, TuSimple’s Cheng Lu said it’s likely to file suit against Bot Auto.
“It’s in direct competition with us and of course we’re going to have to sue him,” Lu told Forbes. “It isn’t fair for TuSimple shareholders that someone took all the trade secrets, the knowledge that we spent billions of dollars developing.”
Hou, who didn’t sign a separation agreement or receive any compensation related to his departure from TuSimple, said he’s not concerned about potential legal action by what remains of his former company.
“The beauty of the United States is that this is a free country. Everyone can sue everyone for everything,” he said. “We have built everything from new technology by ourselves. We don’t really see any angle for them to sue.”
Currently, TuSimple’s Chen and Lu are attempting to pivot the company and use its work in AI to create video games and animation in China. Hou has had no involvement with the company since his termination and is skeptical it will succeed in its new incarnation.
“I would say it’s laughable,” Hou said. “It’s like one day you open up a sports website and you learn that Leonel Messi has declared that he’s going to retire from soccer and play basketball. I mean, it’s total nonsense.”
Investors in Bot Auto’s round include Brightway Future Venture, Cherubic Venture, EnvisionX Venture, First Star Venture, Linear Capital, M31 Capital, Taihill Venture and Uphonest Venture.
