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General Motors has announced that its self-driving unit is getting a $2.25 billion investment from the SoftBank Vision Fund, a major venture investment effort that was started by the Japanese tech giant in 2016. Cruise Automation, which GM bought in 2016 for $1 billion to jump-start its self-driving efforts, will get $900 million when the transaction closes and $1.35 billion when GM is ready to deploy its autonomous cars for commercial use (which is currently slated for 2019).
GM also announced that it will pump a fresh $1.1 billion round of investment into Cruise when the transaction closes, bringing the total to $3.35 billion. When all its investments have been made, SoftBank Vision Fund will own a 19.6 percent stake in Cruise.
While a number of different takes on self-driving technology are currently being tested, it’s not yet clear which ones will be the most commercially viable or whether some mix of all of them will ultimately change the way we get around. Will we hail a self-driving car from a service like Uber or Lyft? Will we buy cars from automakers that can drive themselves? Will we allow those cars to be hailed by others when we’re not using them? Will fully self-driving technology only make sense in a public transportation setting?
There are a lot of questions about what will happen with self-driving cars, so there are also a lot of answers
Perhaps because of this uncertainty, there is one thing that is clear about self-driving cars: whatever does happen with them, it’s likely that no one company will go it alone. While GM and Cruise are working on their own commercial autonomous ride-hailing service, GM also has a self-driving partnership with Lyft that kicked off in early 2016 before the acquisition of Cruise. Lyft is working with Ford (which spent $1 billion on its own obscure self-driving startup) to tie the ride-hailing service’s app platform into the automaker’s self-driving cars.
Lyft is also working its own self-driving technology stack that serves as the foundation for an open platform for automakers and other companies to build on, an idea that has already attracted Jaguar Land Rover, NuTonomy, Drive.ai, and Waymo, the self-driving company that was spun out of Google.
Like Lyft, Waymo is also trying to build a self-driving stack that other companies can work with to make autonomous cars a reality. (A handful of startups, like Aurora, which is led by the former head of Google’s self-driving program, are trying a similar business model.) It has since struck a partnership with Intel, which has a self-driving unit of its own in Mobileye, the former partner of Tesla’s that helped develop the first Autopilot. Waymo is also working with Jaguar to build 20,000 self-driving I-Pace SUVs, and is working on a deal with Honda. Waymo got its true start by working out a deal with Fiat Chrysler Automobiles, which was renewed today in a huge way, and the two sides are discussing the possibility of selling their self-driving minivans.
The most obvious exception to the partnership model that created this dense web is Tesla. While Tesla developed Autopilot with help from Mobileye, the two split after disagreements over the cause of a fatal crash in 2016. Since then, Tesla created a new version of Autopilot in-house, and the company is still working toward realizing CEO Elon Musk’s vision of making cars that drive themselves so well that they can operate as a shared fleet — like a mix of “Uber, Lyft, and AirBnB,” he said recently.
The most notable exception to all this is Tesla
With respect to today’s announcement, SoftBank has its hands in a lot of this, too, which — aside from the money — is likely a reason why GM and Cruise were interested. The tech conglomerate acquired a 20 percent stake in Uber late last year during the fallout of Travis Kalanick’s departure from the company. It’s also heavily invested in competing ride-hailing companies like China’s Didi Chuxing, Southeast Asia’s Grab, and India’s Ola. SoftBank has a multibillion-dollar stake in Nvidia, which has become a leading chipmaker that powers a lot of the autonomous cars being tested today. And German auto giant Daimler is a new (but relatively small) part of the $100 billion Vision Fund. (To add one more wrinkle, Daimler and BMW just announced they will merge their new mobility efforts into another spinoff company.)
How this new proximity to all these companies that SoftBank touches changes GM and Cruise’s trajectory likely depends on how the ongoing real-world trials play out. The companies are currently testing self-driving Chevy Bolts in San Francisco, California and Phoenix, Arizona, and they are working on mass-producing a version of the car with no steering wheel or pedals. A more recent plan to launch a small fleet of test cars in New York City has stalled after snags in the regulatory approval process.
For Cruise, the investment news is the latest in what has been a meteoric five-year rise for the company. It started as a project born out of Y Combinator when the goal was to sell a $10,000 kit that outfitted cars with limited DIY self-driving tech. But as carmakers started relying on partnerships and acquisitions to keep pace with the tech industry’s encroachment into the automotive space, Cruise pivoted to full autonomy.
“[W]e discovered that fully driverless technology is a far larger business opportunity and have been working on that quietly ever since,” CEO Kyle Vogt told The Verge at the time of the GM acquisition in 2016. He was right. Cruise is now valued at $11.5 billion after today’s investments.
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