Tuesday, January 31, 2023

Microsoft invests in $ 30 billion driverless car maker Cruise

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Microsoft has invested in Cruise, General Motors’ driverless car unit, in a $ 2 billion funding round that gives the self-driving business a $ 30 billion valuation.

Cruise, which was purchased by GM for “over a billion dollars”In 2016, when it had just 40 employees, it now has nearly 2,000 employees and represents more than 40% of GM’s $ 71.5 billion market capitalization.

His latest investment cycle brings him face to face with Waymo, Google’s sister company, as the world’s most valuable autonomous driving start-up. Waymo raised $ 3.2 billion last year in an undisclosed valuation that two people said at the FT was “over $ 30 billion.”

The investment in Cruise is Microsoft’s first major foray into driverless cars, although the software company has a “Connected car” activity which provides “digital chassis” and cloud services to companies like Volkswagen, BMW and Ford.

Satya Nadella, chief executive of Microsoft, said Cruise and GM would use Microsoft’s Azure cloud computing platform, “to help them evolve and integrate autonomous transportation.”

Mary Barra, GM of GM, said America’s largest auto company “would reap even more benefits from cloud computing by launching 30 new electric vehicles around the world by 2025 and creating new businesses and services to boost the growth”.

Existing investors GM and Honda also contributed in the final round, but no specific breakdown was disclosed. SoftBank’s Vision Fund is another investor in Cruise, having invested $ 2.25 billion in 2018, for a valuation of 11.5 billion dollars and in addition to its investment in 2019 during the valuation of the company to $ 19 billion.

The latest fundraiser came after a difficult 2020, when Covid-19 halted driverless vehicle testing. Cruise was able to resume testing in San Francisco by becoming an “essential service” providing food delivery with an alternate driver.

“It kept us on the road. . . while we have made spectacular progress in off-road simulation, testing and development, ”Dan Ammann, Managing Director of Cruise, told FT late last year. “In the context of a year full of bad things, we were positively surprised by the ability to continue working, to maintain productivity.”

A year ago, Cruise unveiled its flagship vehicle, the Origin, an all-electric, salon-like vehicle on wheels with no steering wheels or pedals.

The bulk of its testing is carried out by a fleet of modified Chevy Bolts with a back-up driver, although at the end of last year he was given a license to remove the safety driver altogether.

It is uncertain when these cars could actually be deployed for passengers. Cruise had initially hoped to launch a driverless phone service in San Francisco in 2019, but plans have been postponed indefinitely.

As a sign of business progress, it signed a deal in November to provide Walmart customers with contactless delivery in the Scottsdale, Ariz. Area, though a standby driver will still be behind the wheel.

In contrast to soaring Cruise and Waymo valuations, Amazon bought competing startup Zoox for $ 1.3 billion last year, which some analysts believe has similar technology to Cruise, but with a smaller workforce. .

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