By on May 31, 2018

GM Cruise self-driving Testing

Several months after procuring a large ownership stake in Uber, SoftBank has placed $2.5 billion into General Motors’ self-driving program. The automaker intends to begin deploying autonomous vehicles next year and CEO Mary Barra says her company will invest $1.1 billion of its own funds into the effort to ensure the timeline is adhered to.

Thanks to the hefty investment from SoftBank’s Vision Fund, the Japanese holding company now owns roughly 20 percent of General Motors’ tech subsidiary, known as Cruise Automation. While tech firms and automakers have been driving hard to surpass each other in terms of autonomous development for years, GM currently appears to have the most riding on the hardware. 

The long-term strategy for General Motors sees ride sharing, taxi services, and personal data acquisition as a huge financial opportunities. By launching 13 million connected cars over the next several years, the company thinks it can accrue wealth through an in-car digital marketplace that sells apps and services. Afterward, it can collect driver data (purchasing choices, driving habits, etc.), sell it off to whoever wants it (including insurance companies), and issue in-car advertisements — something it’s already pursuing with help from IBM’s Watson.

However, the keystone to all of this is self-driving cars. The less time a driver has to spend looking at the road, the more time they can spend interacting with the digital marketplace and engage with GM’s carefully chosen partners. Essentially, General Motors can continue making money as a car manufacturer while running a healthy data-focused side business.

It’s something other automakers are considering and actively working on, but GM is making the most noise. Wall Street responded favorably following the company’s initial announcements in 2017, but the automaker’s stock price has been comparatively herky-jerky through 2018.

According to Bloomberg, $1.35 billion of SoftBank’s investment is conditional on the carmaker’s autonomous-driving arm being able to deploy vehicles next year. With so much riding on Cruise’s success, it seems unlikely General Motors would agree to a deal without being highly confident it can deliver.

News of the announcement drove GM’s share price up over 10 percent on Thursday. Assuming it maintains that trajectory, it would result in the largest single-day increase of automaker’s shares in almost a decade.

While SoftBank’s investment is the biggest news in the autonomous driving sphere, it’s not the only story. Waymo announced it will add roughly 62,000 Chrysler Pacifica vans to its fleet. The company intends to expand its driverless ride-hailing program into new markets after piloting it in Phoenix, Arizona, this year.

[Image: General Motors]

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5 Comments on “Japan’s SoftBank Dumps Cash Into America’s Autonomous Vehicles, Sets GM Deadline for 2019...”

  • avatar

    Are these the ones without steering wheels, where you’re a prison..PASSENGER?!

    God help us all!

  • avatar

    Am I the only one who thinks that autonomous cars are abad idea ? The question of liability alone makes it a risky proposition. Plus, I will never trust a driverless car, ever. There will probably be roads from which they are banned. I will stick to those roads.

    • 0 avatar

      After a vicious commute to work this morning, I think you’re pretty much on your own. Too many poorly-trained drivers in too much of a hurry, unwilling to share the road. Put a tablet in front of them and let a computer patiently navigate them to work.

  • avatar

    only if ALL cars are autonomous! all autonomous vehicles must be equipped with multiple restraints, helmets, and crash proof cocoon systems and 2 car lengths distance kept per 10 mph of speed! still wouldn’t want to be sitting in one broken down on I 24 going to or from Nashville!

  • avatar

    Does anyone remember the cop cars in the movie Demolition Man ? Auto drive with a foam system to protect the driver and passengers in case of a crash. “Take this job and SHOVEL it””.

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