Microsoft Partners With Cruise On Self-Driving Vehicles, Invests $2 Billion
Microsoft is partnering with Cruise, General Motors’ self-driving subsidiary, to help accelerate autonomous vehicles’ sales. The software giant is also trying a new $2 billion capital investment for Cruise, along with former investors GM and Honda, bringing the company’s valuation of AV to $30 billion.
Microsoft and Cruise are signing a “long-term strategic partnership” – although this partnership will not be exclusive. It is one of Microsoft’s first partnerships with a stand-alone vehicle company. As part of the deal, Cruise will use Azure, Microsoft’s cloud computing service, to help accelerate the process of making a profit from its fleet of autonomous vehicles. In turn, Microsoft will use its relationship with Cruise to expand further into the transportation industry.
Cruise has shown impressive fundraising talent in recent years, despite being seen as lagging behind its main rival Waymo in technical strides. In 2018, Cruise obtained an investment of $2.25 billion from the SoftBank Vision Fund. Later, GM partnered with Honda to make a custom-built self-driving car. The Japanese company has said it will allocate $2 billion to the struggle of over 12 years, coupled with a $750 million investment in Cruise. In 2019, Cruise obtained a $ 1.15 billion investment from SoftBank, Honda, GM, and T. Rowe Price Group. The recent investment valued Cruise at $19 billion.
Meanwhile, Waymo has only been involved in a $3 billion external fundraising. However, Alphabet has precisely taken numerous actions in marketing its technology. Earlier, Waymo announced it would begin offering paid customers rides in its fully driverless vehicles in Phoenix, Arizona.
Recently, Cruise began testing driverless vehicles for the first time in San Francisco. But the company does not permit non-employees to drive in its vehicles. The company had planned to open a car-hailing platform but failed, and has not yet officially announced a new date.
Last year, Cruise revealed the Cruise Origin, a complete driverless prototype car without a steering wheel, pedals, or any functions normally associated with human driving. The vehicle, which will be produced at the GM plant in Detroit-Hamtramck, is being built to be shared by more passengers – although it remains to be seen how much the craving for common vehicles in a post-COVID era. Cruise also unveiled a new set of safety models designed to keep people socially away while traveling and the vehicle sanitized amidst trips.
Microsoft has been largely uninvolved in the race to build autonomous vehicles among the world’s largest technology companies. But the software giant is still positioned to take advantage of the technology, especially when it comes to vehicle-to-vehicle systems. Today, connected car networks engulf a flood of digital information, including cutting-edge driver assistance options such as automatic cruise control, automatic braking, and lane-keeping assistance. Soon, that information will be the support for autonomy.
Microsoft has been quietly working behind the scenes to make a connected vehicle platform over its Azure cloud service. Renault Nissan became the first to get involved in this in January 2017. Also, Volkswagen joined in October 2018.
This is also a change for General Motors. Since 2011, GM has used Google’s e-mail suite and applications for its 100,000 workers. Presently, GM, which is North America’s largest automaker, will partner with Microsoft for its digital cloud needs.