All aboard the self-driving bandwagon
GM and Softbank are the most recent firms to invest in self-driving cars. Japanese holding company Softbank announced its investment of $2.25 billion into GM’s self-driving development. In December, the firm purchased a 15% stake in Uber, who is also testing self-driving functionalities.
GM will follow suit, investing $1.1 billion in the same joint project, called GM Cruise. They plan on rolling out self-driving cars as soon as next year.
In a record-high partnership to develop self-driving technology, Softbank will own 20% in the joint venture, pledging $900 million now and the other $1.35 billion once the cars hit the market.
After the announcement on Thursday, GM’s (GM) stock rose 12.87%, which marks their largest one-day increase since 2010.
Not only does this deal provide GM with more cash for research and development, but it also benefits them strategically. With a Japanese partner, they can more easily breach into the Asian market with this new technology. Additionally, they now have a mutual investor with Uber, so they could collaborate in the near future.
Plus, this is a brilliant move for Softbank. First, GM has the capabilities of building many vehicles quickly and efficiently. If they can implement this technology, then they can roll it out quickly and in large masses. Also, they have many different vehicles, ranging from Sedans to SUVs to trucks – thus, the self-driving technology could be tailored to almost any consumer.
Other self-driving technology firms are following suit. Google’s Waymo has recently partnered with Fiat Chrysler to implement its technology in its cars, and Ford has invested in Argo AI, a technology firm also investing in self-driving cars.
Self-driving cars may face some roadblocks, but they are trucking on harder than ever.
Featured image via Flickr/MIKI Yoshihito