Microsoft partners with Cruise on self-driving cars, and chips in for $ 2 billion investment

Microsoft is teaming up with Cruise, the self-driving subsidiary of General Motors, to accelerate the commercialization of autonomous vehicles. The software giant is also making a new $ 2 billion equity investment for Cruise, along with previous investors Honda and GM, raising the AV company’s valuation to $ 30 billion.

Microsoft and Cruise are entering into a long-term strategic relationship – although the partnership will not be exclusive. This is Microsoft’s first partnership with an autonomous vehicle company. As part of the agreement, Cruise will use Azure, Microsoft’s cloud computing platform, to speed up the process of making money from its fleet of autonomous vehicles. In turn, Microsoft will leverage its relationship with Cruise to expand more into the transportation sector.

“Advances in digital technology are redefining every aspect of our work and lives, including how we move people and goods,” Microsoft CEO Satya Nadella said in a statement. “As the preferred cloud of Cruise and GM, we will apply the power of Azure to help them scale and make autonomous transportation mainstream.”

Cruise has shown impressive fundraising skills over the past few years, although it is seen as lagging behind its main rival Waymo in terms of technical performance. In 2018, Cruise secured a $ 2.25 billion investment from the SoftBank Vision Fund. Later that year, GM partnered with Honda to design a purpose-built self-driving car. The Japanese carmaker has said it will spend more than $ 2 billion on the effort over 12 years, including a $ 750 million investment in Cruise. In 2019, Cruise secured a $ 1.15 billion investment from GM, SoftBank, Honda and T. Rowe Price Group. The latest investment valued Cruise at $ 19 billion.

Meanwhile, Waymo has just participated in a $ 3 billion external fundraising round. But the Alphabet company has probably made more progress in commercializing its technology. Last October, Waymo announced that it would be offering rides to paid customers in its vehicle without drivers without safety drivers in Phoenix, Arizona.

Cruise recently began testing its fully driverless vehicles in San Francisco for the first time. But the company does not allow non-employees to drive in their vehicles. The company planned to launch a commercial taxi service in 2019, but could not do so and has not yet publicly committed to a new date.

Last year, Cruise unveiled the Cruise Origin, a driverless vehicle, without a steering wheel, pedals or any control panels commonly associated with human driving. The vehicle, which will go into production at GM’s Detroit-Hamtramck plant, was built to be shared by multiple passengers, though it remains to be seen how much appetite there is for shared vehicles in a post-COVID world. Cruise recently unveiled a new set of safety protocols designed to keep people socially distracted while traveling and to disinfect the vehicle between fares.

Microsoft was mostly absent from the race to develop autonomous vehicles among the world’s major technology companies. But the software giant is still willing to take advantage of the technology, especially when it comes to vehicle-to-vehicle communication. Linked car networks today are embracing an avalanche of digital information, including advanced driver assistance features such as automatic braking, customizable cruise control and lane-keeping assistance. This information will soon be the backbone of autonomy.

Microsoft has been quietly working behind the scenes to build a connected vehicle platform on top of its Azure cloud system. Renault Nissan was the first to commit to it in January 2017. Volkswagen announced in October 2018.

It’s also a move for General Motors. GM has been using Google’s email and application package for its 100,000 employees since 2011. But now, GM, which is the largest automaker in North America, will work with Microsoft for its cloud computing needs.