Microsoft Bets Bigger on Driverless-Car Space With Investment in GM's Cruise
By Mike Colias
Microsoft Corp. is investing in General Motors Co.'s
driverless-car startup Cruise as part of a strategic tie-up,
another sign of renewed interest in the autonomous-technology space
after a relatively quiet period.
Microsoft is among a group of companies that will invest more
than $2 billion in San Francisco-based Cruise, which has been
majority owned by GM since early 2016. The financing brings
Cruise's valuation to $30 billion, Cruise said Tuesday, up from an
estimated $19 billion in spring 2019.
GM is adding to its Cruise investment as part of the funding
round and will retain a majority stake, a Cruise spokesman said.
The investment also includes current stakeholder Honda Motor Co.
and other institutional investors that Cruise declined to name.
Under terms of Tuesday's deal, Cruise will use Microsoft's Azure
cloud-computing service to help it roll out autonomous-vehicle
services. Cruise for years has been testing driverless cars in San
Francisco and plans an eventual robot-taxi service. It is also is
exploring commercial delivery.
Driverless cars are expected to throw off troves of data for
autonomous-service operators to capture, store and eventually
monetize, analysts say. Even on today's cars, auto makers and tech
companies are mobilizing to harness data from the growing number of
vehicles with internet connections.
In a statement, Cruise Chief Executive Dan Ammann said
Microsoft's involvement will help Cruise commercialize its
technology. Microsoft Chief Executive Satya Nadella said the tech
giant wants to help autonomous cars go mainstream.
GM also said Microsoft would be its preferred cloud provider and
help it streamline supply chains and roll out new digital services
The investment is Cruise's first significant infusion in more
than 18 months. The company pulled in about $7 billion in 2018 and
2019 from big investors including Japan's SoftBank Group and
Cruise missed its target of introducing an autonomous
ride-hailing service to paying customers by the end of 2019 and
hasn't set a new timetable. It has signaled recently that it is
getting closer to commercializing its technology, though, including
the hiring this month of Delta Air Lines Inc.'s former operations
chief to oversee aspects like customer service and fleet
There are signs that investor appetite for autonomous-driving
companies has grown following a lull amid challenges in
transforming the technology into viable business plans.
Startup Aurora Innovation Inc. had a valuation of around $10
billion following its recent acquisition of Uber Technologies
Inc.'s autonomous unit, up from about $2.5 billion in 2019. The
market value of Luminar Technologies Inc., which makes laser-based
sensing technology for self-driving cars, has rocketed to around
$10 billion following its initial public offering last month.
Waymo LLC, the autonomous-vehicle division of Google parent
Alphabet Inc., raised at least $3 billion last year and recently
began providing rides to the general public in the Phoenix
RBC Capital analyst Joseph Spak said in a recent research note
that the pace of deals and technical milestones in the
autonomous-vehicle sector are drawing investor interest after "a
tough few years."
Write to Mike Colias at Mike.Colias@wsj.com
(END) Dow Jones Newswires
January 19, 2021 09:17 ET (14:17 GMT)
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