Microsoft and Cruise collaborate to develop self-driving cars and raise $2 billion in investment

Microsoft is working with Cruise, a self-driving subsidiary of General Motors, to help accelerate the commercialization of self-driving cars. Microsoft will also make a new equity investment of US$2 billion in Cruise and the previous Honda and General Motors companies, thereby making the audiovisual company’s valuation as high as US$30 billion.

Microsoft and Cruise are establishing a “long-term strategic relationship”, although this partnership is not exclusive. This is the first cooperation between Microsoft and a self-driving car company.

As part of the transaction, Cruise will use Microsoft’s cloud computing platform Azure to accelerate the profitability of its self-driving cars. Microsoft will use its relationship with Cruise to further expand the transportation field.

Microsoft

Microsoft CEO Satya Nadella (Satya Nadella) said in a statement: “Advances in digital technology are redefining every aspect of our work and life, including how we move people and goods.” “As Cruise and GM’s preferred cloud, we will use the power of Azure to help them scale up and make automated transportation mainstream.”

Although Cruise is considered to lag behind its main competitor Waymo in terms of technical achievements, Cruise has demonstrated amazing fundraising skills in the past few years.

In 2018, Cruise received an investment of US$2.25 billion from the SoftBank Vision Fund. Later that year, General Motors collaborated with Honda to design a dedicated self-driving car.

The Japanese automaker said it will invest US$2 billion in 12 years, including a US$750 million equity investment in Cruise.

In 2019, Cruise received $1.15 billion in investments from General Motors, SoftBank, Honda, and T. Rowe Price Group. The last investment makes Cruise valued at $19 billion.

At the same time, Waymo only participated in external financing of US$3 billion. However, Alphabet can be said to have made greater progress in technology commercialization.

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In October last year, Waymo announced that it would start to provide paid services to all driverless vehicles in Phoenix, Arizona, without the need for safe drivers.

Cruise recently began testing its fully driverless vehicles for the first time in San Francisco. But the company does not allow non-employees to ride in the vehicle.

The company originally planned to launch a commercial taxi service in 2019, but failed to do so and has not publicly promised a new date.

Last year, Cruise launched Cruise Origin, a fully driverless prototype car without a steering wheel, pedals, or any controls normally associated with human driving.

The car will be produced at GM’s Detroit-Hamtramck plant and will be shared by multiple passengers, although it remains to be seen how much demand for shared cars is in the post-COVID world.

Cruise recently released a new set of safety protocols designed to keep people away from society during the journey and to disinfect vehicles between fares.

Microsoft has been absent from the race to develop self-driving cars among major global technology companies. However, the software giant is still ready to profit from this technology, especially when it comes to car-to-car communication.

Today, connected car networks absorb a large amount of digital information, including advanced driver assistance functions such as automatic braking, adaptive cruise control, and lane-keeping assist. Soon, this information will become the backbone of autonomy.

Microsoft has been working quietly behind the scenes to build an interconnected vehicle platform on top of its Azure cloud system. Renault-Nissan became the first car to commit to this in January 2017. Volkswagen signed the agreement in October 2018.

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