What's behind Toyota's big bet on artificial intelligence?

TOKYO -- Silicon Valley tech giants such as Google and Apple have deftly marshaled their software expertise to muscle in on the traditional car industry. Now Toyota Motor Corp. is pushing back with a $1 billion initiative on their home turf.

To lead the push, the Japanese juggernaut has tapped an American car guy who happens to be one of country's foremost experts in robotics and artificial intelligence.

Gill Pratt, who was a program manager for robotics at the U.S. Defense Advanced Research Projects Agency, says Toyota's grand plan is part of a business diversification ordered by CEO Akio Toyoda.

"It's not just a probe. It's a huge effort," Pratt told Automotive News. "There is a desire for [Toyota] to add software to the repertoire of what it's great at, from Akio on down."

The investment, announced Friday, Nov. 6, establishes a U.S. r&d company that will develop artificial intelligence systems, which Toyota hopes will guide autonomous vehicles and other products, such as household robots. More broadly Toyota wants to be a leader in programming software, just as it is in automotive hardware.

Pratt, 54, isn't shy in sharing his very personal reasons for wanting to help retool Toyota into a software player.

As a child, he witnessed another boy run down and killed in the street by a car. More recently, he felt his elderly father's pangs of indignity when his children finally took away the car keys and then moved him out of his house to a nursing home.

Toyota's vision for autonomous driving and domestic helper robots promised more pleasant transitions for such life crossroads.

Now Pratt will steer the effort as CEO of Toyota Research Institute Inc., the company Toyota will ramp up over the next five years to develop artificial intelligence and robotics.

"It's a question of whether we can leverage the incredible skills that we have in design, manufacturing and support into other fields and weave software into what the company's good at," Pratt said. "And I think the answer might be yes."

Toyota Research Institute will be located near Stanford University in Palo Alto, Calif., Toyota said. Another office will be set up near the Massachusetts Institute of Technology in Cambridge, Mass., where Pratt once taught. Operations begin in January.

Pratt, outlining the new company at a Tokyo press conference, said the research institute will seek to develop systems that prevent traffic accidents, make driving accessible to more people and apply Toyota's outdoor mobility technology to indoor scenarios.

Pratt was hired by Toyota in September as part of a plan to invest $50 million to set up joint research centers for artificial intelligence at MIT and Stanford. The injection of $1 billion in additional funding underscores Toyota's dedication to the technology.

Indeed, Pratt described the move as transitioning the world's biggest automaker away from a past of bending metal and toward a future of programming silicon.

"TRI will aim to develop technology ... to expand Toyota's boundaries to positively impact society," Pratt said. "Toyota will contribute to society by transforming from a successful hardware company to a new company that integrates software technology as well as builds the world's best hardware."

Pratt's grounding in robots and cars goes way back.

As a child he fell in love with the animated Japanese TV series "Tetsujin 28-go." The series, dubbed into English as "Gigantor," chronicled the adventures of a flying robot and his boy master.

Pratt's father, a 1950s immigrant from Israel, worked at a Ford Motor Co. assembly plant in New Jersey and instilled Pratt with an eye for cars. Pratt says his first rides were '60s muscle cars, including a Pontiac LeMans and a Dodge Charger.

At Pratt's Tokyo intro, Toyoda screened a photo of a younger, hippy-haired Pratt by a raised car. "When he showed me this picture of him doing a brake job on a Corolla 35 years ago, I really, really wanted to work with him," Toyoda said.

Pratt said the new technology will be channeled into cars that can help handicapped people or the elderly stay behind the wheel. It also can deliver high-performance driving experiences to drivers who don't have the skill but still want the thrill.

"We do not have to give up fun-to-drive with autonomy," Pratt said. "In fact, one can help the other."

Pratt's company also will feed into at-home technologies such as helper robots. Toyota already has a line of so-called partner robots. Its latest, the HSR, or Human Support Robot, debuted in June.

The HSR resembles a rolling trash can with a robotic arm extending from the top to help the elderly or infirm retrieve objects from hard-to-reach places. The goal: Allow seniors the dignity of aging in place at their own homes.

By bringing autonomous driving research in-house, Toyota is staking a claim to a field in which high-tech companies such as Google had been making inroads.

"The rapid adoption of advanced technology for the purposes of autonomous driving and connected car services means car companies have to act more like tech startups than traditional automakers," Kelley Blue Book Senior Analyst Karl Brauer said.

Artificial intelligence is seen as a key to improving self-driving cars' ability to filter the reams of data collected about their surroundings by sensors. It is critical to judging the erratic behavior of pedestrians, for instance, and also can adjust self-driving cars' behavior to the mannerisms of their owners.

Pratt said it was unclear when his research would deliver technology that would make it into Toyota's production cars.

The company's mandate is to take on a multitude of ambitious projects with the understanding that most won't pan out, he said. Early results likely will feed into navigation systems that predict traffic conditions, -- advising on how traffic will be a half-hour down the road, rather than traffic conditions at the moment.

Toyota Research Institute will hire about 200 employees, with about 20 percent coming from Toyota and the rest from outside. It also will open a Tokyo office, though that timeline is still undecided.

Like several other automakers, Toyota aims to have semiautonomous vehicles on the market by 2020. Those cars would be able to merge onto highways, change lanes, pass cars and navigate to a destination by themselves.

Pratt said the race to develop artificial intelligence and autonomous cars is wide open. A late starter or even a nontechnical company such as Toyota can leapfrog to the lead.

"If the race is very long, who knows who will win?" Pratt said. "The truth is we are only at the beginning of this race."