Japan’s SoftBank will invest $2.25 billion in General Motors’ autonomous vehicle unit Cruise, the companies have said, a deal that validates the venerable Detroit automaker’s leadership in self-driving cars and sent GM shares up nearly 13 per cent.
The move by SoftBank’s $100-billion Vision Fund is one of the highest profile, largest investments to date in self-driving technology, an industry that could revolutionise transportation but faces engineering, safety and regulatory challenges, as well as scepticism among potential users, according to a Reuters report Friday.
SoftBank has made a string of large bets in so-called mobility companies, such as ride services provider Uber Technologies, expecting that transportation services for people and goods will explode. The Cruise deal extends that wager, betting that computers will displace drivers and cut operating costs.
GM Chief Executive Officer Mary Barra On Thursday said GM might explore “other opportunities” with some of the companies that SoftBank has funded, including Uber, China’s Didi, India’s Ola, and Southeast Asia’s Grab.
The partnership values Cruise at $11.5 billion, a figure exceeding some analyst targets and a triumph for GM, which was criticised for overpaying an estimated $1 billion for the startup two years ago.
The GM share jump on Thursday was the stock’s largest one-day gain since the company re-listed after its 2009 bankruptcy.
GM Cruise and Alphabet’s Waymo are often described as leading the pack of technology and auto companies competing to create self-driving cars and integrate them into ride services fleets.
Alphabet, which plans to launch a robo taxi service later this year, underscored its own ambitions on Thursday, announcing a deal to buy up to 62,000 minivans from Fiat Chrysler Automobiles for its self-driving fleet.
Ford Motor and BMW both plan to deploy self-driving cars in 2021; Tesla has talked about creating a network of self-driving cars and Uber says it is sticking with a development effort despite an accident in which its self-driving car killed a woman in Arizona.
That accident raised concerns around the United States about the terms under which self-driving cars should be allowed to test and operate.
