Archer strikes deal with Boeing in latest bid to transform aviation through AI

By Claudia Assis

Archer Aviation's stock is flying higher after the company agreed to buy three business units from Boeing

Archer Aviation and Boeing entered a technology-sharing arrangement around self-flying aircraft.

Boeing is getting leaner - and in the process, Archer Aviation's stock is getting a big boost.

The aerospace and defense giant (BA) struck a deal with Archer (ACHR) to sell three of its businesses related to air taxis, drones and AI-powered autonomous-flight technology, the companies said Monday.

In turn, Boeing takes a 19.75% stake in the air-taxi company, and the two will enter a technology-sharing deal around autonomous flights. Shares of Archer rose 12% on Monday and closed at their highest level in more than two months. Boeing's stock fell nearly 1%.

Boeing has focused on its core jet-making businesses as part of an ongoing turnaround, and it's been shedding some of its more ancillary units in recent months.

For Archer, the deal gives it an edge over Joby Aviation (JOBY) and other rivals in the nascent air-taxi sector.

Financial terms of the deal were not disclosed. Analysts at Jefferies said that one of the businesses being sold, drone-maker Insitu, has about $200 million in annual sales and is profitable.

Boeing is also letting go of Wisk Aero, which is developing electric, autonomous air taxis, and SkyGrid, an air-traffic management system for autonomous flights.

The deal, expected to close by the end of the year, "creates an end-to-end physical AI platform for aerospace and defense," Boeing said in a statement.

It also allows Wisk, SkyGrid and Insitu "to accelerate capability development and time to market while ensuring Boeing capitalizes on its investments in these technologies over the past two decades through continued development in our core businesses," the company said.

The Federal Aviation Administration launched a pilot program for electric vertical take-off and landing, or eVTOL, in March. The trial runs are expected to take place for three years after the first project becomes operational, the FAA has said.

-Claudia Assis

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08-10-26 1852ET