Microsoft joins Cruise on self-driving cars with $ 2 billion investment

Microsoft is joining forces with Cruise, the autonomous subsidiary of General Motors, to help accelerate the commercialization of autonomous vehicles. The software giant is also contributing a new $ 2 billion capital investment to Cruise, along with previous investors Honda and GM, bringing AV’s valuation to an incredible $ 30 billion.

Microsoft and Cruise are entering into “a long-term strategic relationship” – although the partnership is not exclusive. It is Microsoft’s first partnership with an autonomous vehicle company. As part of the deal, Cruise will use Azure, Microsoft’s cloud computing platform, to help accelerate the process of making money from its autonomous vehicle fleet. In turn, Microsoft will leverage its relationship with Cruise to expand further in the transportation sector.

“Advances in digital technology are redefining all aspects of our work and life, including how we move people and goods,” said Microsoft CEO Satya Nadella in a statement. “As Cruise and GM’s favorite cloud, we’ll apply the power of Azure to help them scale and make autonomous transportation popular.”

Cruise has demonstrated an impressive talent for fundraising in recent years, despite being seen as behind his main rival, Waymo, in terms of technical achievements. In 2018, Cruise secured a $ 2.25 billion investment from the SoftBank Vision Fund. Later that year, GM teamed up with Honda to design a specially built autonomous car. The Japanese automaker said it would dedicate $ 2 billion to the effort over 12 years, including a $ 750 million capital investment in Cruise. In 2019, Cruise secured a $ 1.15 billion investment from GM, SoftBank, Honda and T. Rowe Price Group. That latest investment valued Cruise at $ 19 billion.

Meanwhile, Waymo participated in just one $ 3 billion round of fundraising. But Alphabet has undoubtedly made further progress in terms of commercializing its technology. Last October, Waymo announced that it would start offering trips to paid customers in their vehicles entirely without a driver and without security drivers in Phoenix, Arizona.

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

Last year, Cruise unveiled Cruise Origin, a fully driverless vehicle prototype, without steering wheel, pedals or any controls normally associated with human steering. The vehicle, which will go into production at GM’s Detroit-Hamtramck factory, is built to be shared by multiple passengers – although 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 security protocols designed to keep people socially apart while traveling and the vehicle cleaned between tickets.

Microsoft has been absent from the race to develop autonomous vehicles among the world’s major technology companies. But the software giant is still prepared to profit from the technology, especially when it comes to vehicle-to-vehicle communication. Today, networks of connected cars absorb a deluge of digital information, including advanced driver assistance features such as automatic braking, adaptive cruise control and assistance to keep track. Soon, this information will be the backbone of autonomy.

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

This represents a change for General Motors as well. Since 2011, GM has been using Google’s email and application suite for its 100,000 employees. But now GM, which is the largest automaker in North America, will work with Microsoft for its cloud computing needs.