Editor's note: This report's headline has been corrected to reflect the nature of Toyota's relationship with Microsoft in regard to Toyota Connected.
(Bloomberg) -- Toyota Motor Corp. is collaborating with Microsoft Corp. to consolidate much of the carmaker’s global research in telematics, data analytics and network security services as the auto industry expands connected-vehicle technologies.
The Toyota Connected venture will be headed by Zack Hicks, chief information officer at Toyota Motor North America, and will be based in Plano, Texas. The initial investment will be $5.5 million, the automaker said Monday.
Toyota plans to use data science through Microsoft’s Azure cloud technology to develop services that “help to humanize the driving experience,’’ according to a statement. “Toyota Connected will help free our customers from the tyranny of technology,’’ Hicks said in the statement.
Automakers are expanding connected-car services as the industry heads toward technologies such as autonomous vehicles. Telematics combines computers and wireless technology to provide services such as infotainment and real-time traffic updates to moving vehicles. Toyota and Microsoft have been collaborating in this area since 2011.
Kurt DelBene, executive vice president of corporate strategy and planning at Microsoft, said the company will work with Toyota Connected “to make driving more personal, intuitive and safe.”
The new entity will study everything from cars that help each other analyze traffic patterns to use-based insurance pricing to connecting drivers with information and security services in their homes.
As the technology improves, vehicles will study their owners’ habits and seek ways to make themselves helpful, Hicks told reporters on a conference call.
A car may use sensors in the steering wheel to monitor a driver’s heart rate, and then relay the data to a doctor. Or, if the vehicle recognizes that the driver is a Dallas Cowboys football fan and may be headed toward the stadium, it may ask whether it should call ahead and prepay for parking.
Drivers will be able to opt out of any or all of these services, Hicks said. But he said he’s hoping they’ll be popular enough to encourage drivers to return to Toyota when it’s time to buy another car.
The effort comes amid a broader push by the world’s largest automaker to accelerate its research into artificial intelligence and robotics.
In January, Toyota began a $1 billion, five-year investment in Toyota Research Institute Inc., which is setting up centers near Stanford University and Massachusetts Institute of Technology. Leading the effort is Gill Pratt, the former top robotics engineer for the U.S. military.