General Motors and Microsoft Corp. are leading a $2 billion investment round in self-driving car startup Cruise in a deal that will bring the software giant’s cloud and edge-computing capabilities to the venture.
The new funds will raise Cruise’s post-investment valuation to an estimated $30 billion, up from $19 billion when T. Rowe Price Associates Inc. invested in the company in 2019, Cruise said in a statement. Cruise partner Honda Motor Co. and other institutional investors are also participating in the new round.
The partnership with Microsoft gives Cruise, which is majority owned by GM, a major software player in its corner. That will help the company compete with Waymo, which has access to the software capabilities of parent Alphabet Inc.
GM shares closed Tuesday's trading up 9.8 percent to $54.84.
Cruise will be able to use Microsoft’s Azure cloud-computing platform to manage its self-driving vehicle network. Azure will handle data and mapping, as well as enable cars to communicate with Cruise’s back office and customer-facing app for ride-hailing. It’s a vital piece of software infrastructure that Cruise needs to build its planned commercial robotaxi service.
“Our mission to bring safer, better and more affordable transportation to everyone isn’t just a tech race - it’s also a trust race,” Dan Ammann, Cruise’s CEO, said in a statement. “Microsoft, as the gold standard in the trustworthy democratization of technology, will be a force multiplier for us as we commercialize our fleet of self-driving, all-electric, shared vehicles.”
Cruise is preparing to start charging fares for its service in San Francisco later this year.
GM also said it will work with Microsoft as its preferred public cloud provider to accelerate its digitization initiatives, including collaboration, storage, artificial intelligence and machine learning capabilities.