SoftBank Group’s Vision Fund will invest $2.25 billion in General Motors’ autonomous vehicle (AV) unit to strengthen the automaker’s plans to commercialise AV technology.
Japan-based SoftBank will take a 19.6 per cent stake in GM Cruise, with GM adding an investment of $1.1 billion when the Vision Fund deal closes.
In a statement, GM chairman and CEO Mary Barra (pictured) said: “Our Cruise and GM teams together have made tremendous progress over the last two years. Teaming up with SoftBank adds an additional strong partner as we pursue our vision of zero crashes, zero emissions and zero congestion.”
The GM and SoftBank Vision Fund investments are expected to provide the capital necessary to reach commercialisation at scale beginning in 2019, GM said.
All told, the investment values Cruise at $11.5 billion.
The Vision Fund investment will be made in two tranches. At the closing of the deal, the Vision Fund will invest $900 million. When Cruise AVs are ready for commercial deployment, the fund will complete the second tranche of $1.35 billion, subject to regulatory approval.
SoftBank is working on AV technology through a number of investments and owns stakes in taxi-booking companies including Uber, Didi Chuxing in China, Ola in India and Singapore-based Grab.
The Vision Fund invested in chipmaker Nvidia and driver-behaviour tracker Nauto, but the Cruise investment is its biggest step into the AV sector and will certainly put pressure on Google.
SoftBank established the $100 billion Vision Fund in October 2016, with a view to investing in new innovations across a range of industries.
Cruise and Google’s Waymo unit are leaders in developing self-driving technology for cars. Google recently announced it will purchase 62,000 vehicles from Fiat Chrysler for a fleet of self-driving taxis due to start service later this year.
Radio Free Mobile’s Richard Windsor said the choice of Cruise in autonomous driving makes complete sense because his latest analysis shows the GM unit came from nowhere to comfortably take the number two slot behind Waymo.
His research found the market for autonomous driving will not be ready until at least 2028, but the technology is likely to be mature long before then, giving stragglers time to catch up.