SoftBank investment in GM Cruise could speed self-driving cars

Reading Time: < 1 minute

In a landmark deal that could accelerate wide-scale deployment of self-driving cars, General Motors Co. said on Thursday that Japan’s Soft Bank Group Corp would invest 2.25 billion dollars in GM Cruise Holdings LLC, the carmaker’s autonomous vehicle unit.

GM shares jumped more than 10% in pre-market trade.

It is one of the largest investments to date in self-driving cars.

In a media briefing early on Thursday at GM headquarters in Detroit, President Dan Ammann said the investment by SoftBank’s 100-billion dollars Vision Fund will enable GM to deploy self-driving vehicles “at massive scale.”

Chief Executive Officer Mary Barra said the company is still “on track” to begin deploying its Cruise AVs in commercial ride sharing fleets in 2019. GM will also invest 1.1 billion dollars in the unit after the deal closes, the company said.

SoftBank Vision Fund will own a 19.6% stake in GMCruise once the transaction is completed.

The partners agreed not to cash out their investments in Cruise for at least seven years, said Michael Ronen, managing partner of SoftBank Investment Advisers.

Barra sidestepped a question about whether GM intends to spin off GM Cruise Holdings as a separate entity, saying GM would “do what’s best for shareholders.”

Ronen soft-pedaled a related question about whether SoftBank intends to consolidate its massive investments in some of the world’s largest ride services companies, including Uber, Didi, Ola and Grab, saying such a decision would be up to each company.

GM holds a sizable stake in Uber rival Lyft.

The SoftBank investment comes at a time when rivals TeslaInc, Alphabet Inc’s Waymo unit and Uber Technologies Inc are stepping up efforts to gain the first-mover advantage in the autonomous vehicle market.