Microsoft has joined in a $2 billion investment in Cruise, the self-driving car company mostly owned by GM.
The investment, announced Tuesday, puts Cruise’s total value at $30 billion, Cruise and Microsoft said.
Microsoft (MSFT) joins Honda (HMC), already a major investor and partner in Cruise, and various institutional investors in the $2 billion total equity investment. The companies did not divulge how large of a portion of that investment Microsoft (MSFT) is making or how large of a stake in Cruise Microsoft (MSFT) will receive as a result of its investment. However, a Cruise spokesperson confirmed that General Motors will retain a majority stake.
Cruise and GM (GM) will also use Microsoft’s Azure cloud computing platform to help develop vehicles and services, the companies added.
Microsoft joins other tech companies that have ventured into self-driving vehicles. Apple has reportedly restarted plans to create it’s own electric self-driving car. Waymo, a leading competitor to Cruise, is a subsidiary of Google’s parent company Alphabet.
Cruise was founded in 2013 and acquired by GM in 2016 for an undisclosed amount. The company’s current president, Dan Ammann, had been president of GM until joining Cruise in 2018.
GM executives said in 2017 that they expected driverless taxi services to one day be a bigger and more profitable business than selling vehicles directly to customers. At the time, though, they also expected Cruise to be ready to serve paying customers by the end of 2019.
Honda first teamed up with GM on Cruise in 2018, announcing then that it would invest $2 billion over 12 years. Honda’s participation in this latest round of investment is in addition to that, a Cruise spokesman said,
Honda worked with GM to develop a purpose-built self-driving car, called the Origin, for things like taxi and delivery services. It has no steering wheels or pedals, and is designed to function entirely without a driver. GM announced last fall that it will be built at GM’s Factory Zero, formerly Detroit-Hamtramck Assembly, a factory in Michigan that is being modified to build only electric vehicles.
Cruise will need an exemption from the National Highway Traffic Safety Administration to operate the Origin because it doesn’t have traditional car components like a steering wheel.
The company has been using modified Chevrolet Bolt EVs to test its technology and has recently begun testing cars in San Francisco with no human driver inside the vehicle. Previously, the cars had always had a human driver in the driver’s seat to take over if needed.
The company hasn’t lived up to its projections so far. In 2017, GM said it would be mass-producing fully autonomous electric cars by the end of 2019. It also announced plans in 2017 to test self-driving vehicles in New York City, but has yet to do so.
The entire self-driving sector has struggled to live up to the hype that has dominated much of the decade. Companies are realizing the immense challenge of building a self-driving car that works, and then proving to regulators that it is safe.
Matt McFarland contributed to this story.