SAN FRANCISCO: General Motors announced an alliance Tuesday with Microsoft on its Cruise autonomous driving venture, combining forces to challenge Tesla and others in an electric car market expected to rev with Joe Biden’s environment-friendly administration in the White House.
The companies have established “a long-term strategic relationship,” and Microsoft will join GM, Honda and institutional investors in a new $2 billion equity investment round, GM and its Cruise subsidiary said in a press release.
“This is a major shot across the bow from Microsoft to Tesla and Waymo and other EV (electric vehicle) autonomous players that Redmond is on its way,” said Wedbush analyst Dan Ives.
“There is an arms race in the EV world and this is the latest collaborative deal with many more on there way, speaking to this trillion dollar market over the next decade.”
Ives and others think Apple is poised to begin putting its technology to work in self-driving, electric cars although the iPhone maker has remained mum on the subject.
Microsoft Azure is a powerhouse in the cloud computing market, so synching GM electric vehicles with Azure computing and artificial intelligence capabilities promises a boon for the car maker, Ives reasoned.
As part of the alliance, Microsoft will also provide hardware and software engineering support to General Motors. The alliance valued Cruise at approximately $30 billion.
“Our mission to bring safer, better, and more affordable transportation to everyone isn’t just a tech race — it’s also a trust race,” Cruise chief executive Dan Ammann said.
“Microsoft, as the gold standard in the trustworthy democratization of technology, will be a force multiplier for us as we commercialize our fleet of self-driving, all-electric, shared vehicles.”
Microsoft CEO Satya Nadella said the joint venture will help General Motors and Cruise “scaling up and making autonomous driving mainstream.”
Last week, General Motors announced plans to build a new fleet of electric trucks.