Microsoft Partners With GM’s Cruise On Self-Driving Cars

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Microsoft Partners With GM’s Cruise On Self-Driving Cars
<a href="https://pixabay.com/users/efes/">efes</a> / Pixabay

General Motors and Microsoft shares moved higher after the two companies announced a partnership for self-driving cars. Microsoft has agreed to join other institutional investors, GM and Honda on a more than $2 billion new equity investment in Cruise, GM’s majority-owned self-driving car segment.

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Q4 2020 hedge fund letters, conferences and more

Details on Microsoft's self-driving car partnership

After the new equity investment, Cruise's post-money valuation is approaching $30 billion, according to CNBC. In today's announcement, the companies said Microsoft will become GM's and Cruise's preferred cloud provider. They will collaborate on hardware and software engineering, cloud computing and manufacturing.

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In a statement, Microsoft CEO Satya Nadella said the company will use its Azure cloud and edge computing platform to help GM and Cruise scale and make self-driving cars mainstream. Cruise will leverage Azure to commercialize its self-driving vehicle solutions at scale.

GM said Microsoft will be its "preferred public cloud provider to accelerate its digitization initiatives, including collaboration, storage, artificial intelligence and machine learning capabilities." The automaker will also work with Microsoft on streamlining its digital supply chain operations and bring new mobility services to market more quickly.

More on GM's Cruise

With the deal, Microsoft gets a stake in a self-driving car company and a major new customer. Autonomous vehicles will produce mass quantities of data when they become widely adopted, so they will need a stable, intuitive cloud computing platform. TechCrunch explained that cloud services will be one of the largest expenses for an autonomous vehicle company.

As the partnership secures a significant new customer for Microsoft, Cruise will also be able to negotiate lower prices with the company for its Azure platform. Additionally, Microsoft will have the chance to test some of its newer systems capable of handling the workloads required to bring machine learning and robotics into the real world.

The fact that the partnership extends to GM is also excellent news for Microsoft from a business perspective. GM plans to launch 30 new EVs worldwide by 2025 and create new services and businesses to drive growth.

GM stock popped more than 9%, while Microsoft shares ticked 1% higher after the announcement.

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