Driverless Chevy bolts are a common sight in the streets of San Francisco, where Cruise is based.
Microsoft has invested in Cruise, the driverless motor unit of General Motors, in a $ 2 billion round of financing that gives the autonomous driver a valuation of $ 30 billion.
Cruise, which was bought by GM for ‘more than $ 1 billion’ in 2016, when it had just 40 employees, now has nearly 2,000 staff members and accounts for more than 40 percent of GM’s $ 71.5 billion market capitalization.
The latest round of investment puts him at the forefront with Waymo, the Google sister company, as the world’s most valuable autonomous manager. Waymo raised $ 3.2 billion last year at an unknown valuation that, according to two people at the FT, was ‘more than $ 30 billion’.
The investment in Cruise is Microsoft’s first major foray into driverless cars, although the software industry does have a “connected car” business that provides “digital chassis” and cloud services to Volkswagen, BMW and Ford.
Satya Nadella, CEO of Microsoft, said that both Cruise and GM will use Microsoft’s cloud computing platform Azure to help them increase autonomous transportation primarily. ”
GM CEO Mary Barra said America’s largest automotive company would “realize even more benefits from cloud computing if by 2025 we launch 30 new electric vehicles worldwide and create new businesses and services to drive growth.” In early trading, GM shares rose more than 9.5 percent after the news.
Existing investors GM and Honda also contributed to the latest round, but a specific outline has not been released. SoftBank’s Vision Fund is another investor in Cruise, which invested $ 2.25 billion in 2018 at a valuation of $ 11.5 billion and replenished its investment in 2019 when the company valued at $ 19 billion.
‘A year full of bad things’
The latest fundraiser took place after a difficult 2020, when COVID-19 stopped testing driverless vehicles. Cruise was able to resume testing in San Francisco by becoming an ‘essential service’ to deliver food deliveries with a backup manager.
“It has enabled us to stay on track … while making dramatic progress with simulation and field testing and development,” Cruise CEO Dan Ammann told FT late last year. “Against the backdrop of a year full of bad things, we were positively surprised by the ability to keep working and continue productivity.”
A year ago, Cruise unveiled its flagship vehicle, the Origin, an all-electric vehicle that looks like a lounge on wheels without steering wheel or pedals.
Most of the testing is done by a fleet of modified Chevy Bolts with a backup driver, although he was given a permit late last year to remove the safety driver completely.
It is not certain when these cars might be used for passengers. Cruise had originally hoped to start a driverless service in San Francisco in 2019, but the plans were postponed indefinitely.
In a sign of commercial progress, the company signed an agreement in November to deliver Walmart customers contact-free in the Scottsdale, Arizona area, although a backup manager will still be at the helm.
Contrary to the rising valuations of Cruise and Waymo, Amazon last year bought the rival self-employed company Zoox for $ 1.3 billion, which according to some analysts has similar technology to Cruise, but a smaller number of people.
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