Google and Ford plan to announce at CES that they will partner to create an independent company to build autonomous vehicles, according to a report from Yahoo! Autos.
Yahoo Autos said three sources "familiar with the plans" believe Ford will announce the partnership in January at the Consumer Electronics Show.
Neither Ford nor Google would confirm the partnership plans.
"We have been and will continue working with many companies and discussing a variety of subjects related to our Ford Smart Mobility plan," Ford stated in a reply to Computerworld. "We keep these discussions private for obvious competitive reasons, and we do not comment on speculation."
Jeremy Carlson, a senior analyst with IHS Automotive, said during a webcast last week that Google is serious about spinning off a separate autonomous car company. Carlson said sources believed Google would develop service-only vehicles and not a traditional car manufacturing business.
Autonomous services vehicles would be used as taxis and deliveries, but not as personally owned vehicles.
"Fundamentally, we should see Google as very serious about ... spinning off into its own company, something it does when serious about a technology," Carlson said.
Last week, reports circulated that Google was planning to spin off its driverless car division into its own company under the Alphabet corporate umbrella sometime next year.
In October, Google restructured and officially became Alphabet, and subjugated its "Google" name as a business unit that will focus on core Internet-related businesses, including search, YouTube and Android.
Google has been testing self-driving "pod" cars on California and Texas roads over the past year. Analysts, however, have been quick to point out that it would be a costly risk for Google to set up its own car manufacturing facility. Instead, it would make more sense for Google to partner with automakers, licensing the autonomous software and enabling sensor technology.
In a blow to Google's plans to roll out driverless cars, California's Department of Motor Vehicles this month rolled out new regulations requiring all autonomous test vehicle to have steering wheels. Google's pod car has no steering wheel.
Ford has also been developing autonomous vehicle technology and testing prototypes, but has been partnering with developers for the software.
Earlier this year, Ford opened an R&D facility in Palo Alto, California, just down the road from electric car maker Tesla Motors.
Ford plans to test a fully autonomous version of its Fusion Hybrid on open roads near its Palo Alto R&D facility this month.
Ford is not alone in its sojourn westward from Detroit.
GM opened its Advanced Technology Silicon Valley Office in Palo Alto to develop an HTML browser for its Cadillac CUE in-vehicle infotainment (IVI) system.
Since 2011, BMW, Honda, Hyundai, Mercedes-Benz, Nissan-Renault and Toyota have all opened R&D centers in Silicon Valley.
Beyond the necessary sensors and cameras, autonomous vehicles are enabled by software. This software operates with artificial intelligence and learns with new experiences, Carlson said.
Autonomous cars will be capable of not only communicating with other vehicles on the roadway, but also with the public infrastructure around them.
"Software brings all that together. That's why we're seeing so much investment and all the mergers and acquisitions," Carlson said.