GM, Cruise to partner with Microsoft for self-driving vehicles
Detroit — General Motors Co. and its autonomous partner Cruise LLC have entered into a long-term strategic relationship with Microsoft Corp. to help commercialize self-driving vehicles faster, the two companies said Tuesday.
Cruise will use Azure, Microsoft’s cloud and edge computing platform, to commercialize its AVs at scale. Microsoft joins GM, Honda Motor Co. and institutional investors in a combined new equity investment of more than $2 billion in Cruise, bringing the valuation of Cruise to $30 billion — up from $19 billion it had in 2019.
The news follows the headlines GM made last week on its EV push during the virtual Consumer Electronics Show that sent GM's stock soaring, breaching $50 a share for the first time since its 2010, post-bankruptcy IPO. GM shares closed Tuesday at $54.85, up nearly 10%, following the Microsoft announcement.
In a statement, Microsoft CEO Satya Nadella said the company will help Cruise and GM "scale and make autonomous transportation mainstream" — another sign that GM technology push is blurring the traditional line between legacy manufacturing and Big Tech.
To reach commercialization, AV companies like Cruise need a cloud platform like Azure to manage data collected from vehicles and to run a dispatch platform for them, said Sam Abuelsamid, principal research analyst for Guidehouse Insights. "There's all kinds of things that you need a robust cloud platform for to run an AV service."
"It's not easy to scale platforms like this," Abuelsamid added. "It takes a lot of expertise. It takes a lot of hardware infrastructure. This is why almost every company that has to do anything with a lot of data goes to one of these cloud providers instead of building it in house."
Cruise CEO Dan Ammann said the use of Microsoft's technology "will be a force multiplier for us as we commercialize our fleet of self-driving, all-electric, shared vehicles.”
Cruise has been testing a fleet of autonomous Chevrolet Bolt-based vehicles on the streets on San Francisco for several years, even during the pandemic last year when it partnered with a local foodbank to deliver groceries to those in need.
Cruise also tests in Phoenix and Michigan. Walmart and Cruise are starting a pilot program this year for customers to have their groceries delivered by one of Cruise’s all-electric self-driving cars. The pilot will take begin in Scottsdale, Arizona.
The company recently said it tested a vehicle without a safety driver in the driver's seat for the first time after receiving a permit from the State of California to do so.
Waymo LLC, a subsidiary of Google parent Alphabet Inc. and one of Cruise's top competitors, offers fully driverless rides in its Waymo One robotaxis in Phoenix. Waymo first started offering rides in driverless vehicles in 2019. Last year, Waymo raised more than $3 billion last year. The company hasn't said what its valuation is.
Cruise initially said it would commercially deploy an AV fleet by the end of 2019, but pushed that goal post back to an unspecified timeframe.
In addition to the Chevy Bolt-based vehicles, GM is manufacturing the Cruise Origin, an autonomous electric shuttle for Cruise. GM spent $1 billion to acquire Cruise in 2016 to help accelerate its autonomous technology development. At the time, Cruise had 40 employees. It now has just under 2,000.
GM said Tuesday it will also use Microsoft as its preferred public cloud provider. The automaker is spending $27 billion on EV and AV technology through 2025 and plans to make 40% of its U.S. entries battery-electric vehicles by the end of that year.
Last year, GM virtually revealed the electric Cadillac Lyriq crossover coming next year and the GMC Hummer EV coming late this year. It will reveal the Chevrolet Bolt EUV virtually on Feb. 14 in a partnership with Walt Disney World.
In a statement, GM CEO Mary Barra said the relationship with Microsoft and Cruise will "help GM realize even more benefits from cloud computing as we launch 30 new electric vehicles globally by 2025 and create new businesses and services to drive growth.”