Microsoft partners with GM to make self-driving cars a reality

Driverless car startup Cruise, a GM subsidiary, today announced the finalization of a two-billion dollar equity fund from primary investors Microsoft, Honda, and GM.

Leading off: Microsoft’s money is the big ticket item here for Cruise. While the company’s valuation has skyrocketed to about $20 billion from investors, netting one of big tech’s trillion-dollar whales has pushed GM stocks up nearly seven percent.

But the cash isn’t the only thing in play here. Per a Reuters report, Microsoft CEO Satya Nadella says the company will provide cloud services for Cruise:

As Cruise and GM’s preferred cloud, we will apply the power of Azure to help them scale and make autonomous transportation mainstream.

Background: Microsoft Azure is quietly becoming a juggernaut. Not only did the big M beat out Amazon for the US government’s Project Jedi contract, it’s also recently entered into a $2 billion contract with OpenAI for cloud services and purchased GitHub.

This type of wheeling and dealing is nothing new for Microsoft, but the timing is interesting.

Quick take: Google’s toiled in the self-driving vehicle space for years with sister company Waymo seemingly perpetually on the brink of commercialization. Unfortunately the market hasn’t quite panned out as quickly as investors had hoped. Between COVID-19 and the unrealistic expectations set when deep learning exploded into the mainstream between 2014 and 2018, we’ve yet to see a single self-driving vehicle licensed for unrestricted use on roadways.

Microsoft’s likely pressing market advantage in a time when AI makers are sort of between big moments. The 2018 hype has died down and driverless cars are no longer just a few months away from commercialization.

The current state of the market has Telsa veering wildly to the left as it continues to attempt to brute force driverless vehicles without the aid of LIDAR or similar systems. Meanwhile Cruise, Waymo and a handful of other companies continue working on more robust systems in the hopes of solving self-driving AI.

That being said, there’s nothing like some good old fashioned competition to spark innovation. Now that Cruise has even bigger backing than just GM, there’s reason for optimism.