FANUY Fanuc Corporation (PK)

TOKYO—Toyota Motor Corp. said Thursday it plans to acquire a small stake in Tokyo-based machine-learning venture Preferred Networks Inc., the latest sign that Toyota is accelerating its development of self-driving cars.

The world's largest auto maker by the number of cars sold said it would take a 3% stake in Preferred Networks for ¥ 1 billion ($8.2 million), valuing the company at ¥ 33.3 billion. The deal is expected to close by Dec. 30.

Toyota aims to make some of its cars fully self-driving on highways by around 2020, meaning vehicles would get on and off the highways and change lanes without driver input. That would be a step forward from the current so-called advanced driver assistance system, which helps drivers maintain an adequate distance between cars and park smoothly.

The purchase indicates a significant recent rise in the value of Preferred Networks. In August, Apple supplier Fanuc Corp. paid Â¥ 900 million in August for a 6% stake, valuing the venture at ¥ 15 billion just three months ago. Nippon Telegraph & Telephone Corp. said in October 2014 it had paid ¥ 200 million for a stake of less than 10% in the company.

Competition in autonomous driving technology has been heating up. In addition to auto makers such as General Motors Co. and Tesla Motors Inc., technology companies such as Google parent Alphabet Inc. have been ramping up research and development toward the goal of driverless cars.

Toyota's investment in Preferred Networks follows its announcement in November that it plans to set up a robotics and artificial intelligence research center in Silicon Valley by January, pouring $1 billion into the project over the next five years.

Preferred Networks has been a partner with Toyota since October 2014, but the two companies haven't released details of their progress. They said Preferred Networks will show an exhibition in Toyota's space at January's CES 2016 electronics show in Las Vegas, demonstrating how artificial intelligence can help teach cars not to crash.

Focusing on machine learning technology including "deep learning," a branch of artificial intelligence that enables machines to learn on their own without much human supervision, Preferred Networks has entered many partnerships with major companies, including Panasonic Corp., Nvidia Corp. and Cisco Systems Inc. since the company's launch last year.

The partnership with Fanuc has been developing machines that can figure out how to assemble devices and even repair other robots.

"We are thrilled with our partnership with Preferred Networks as we aim to change how manufacturing is being done," Kiyonori Inaba, general manager of the robot business at Fanuc, told The Wall Street Journal recently.

At a recent robotics exhibition in Tokyo, the two companies showed off their early achievements. In one demonstration, a Fanuc robot powered by the venture's deep-learning software learned in eight hours how to pick up components from a box most efficiently, a program a veteran engineer would have taken days to write.

"The achievement is impressive because the technology can be applied to many other industrial machines, and that would quickly change how we work," said Toshimitsu Kawano, managing director of Beckhoff Automation Japan.

Write to Takashi Mochizuki at takashi.mochizuki@wsj.com

(END) Dow Jones Newswires

December 17, 2015 03:05 ET (08:05 GMT)

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