General Motors in Detroit today announced Japan’s SoftBank Vision Fund will invest $2.3 billion in GM Cruise Holdings LLC, GM’s self-driving branch. The automaker says the investment will strengthen its plans to commercialize autonomous vehicle technology on a large scale.
GM will also invest $1.1 billion in GM Cruise upon closing the transaction.
“Our Cruise and GM teams together have made tremendous progress over the last two years,” says GM chairman and CEO Mary Barra. “Teaming up with SoftBank adds an additional strong partner as we pursue our vision of zero crashes, zero emissions, and zero congestion.”
The investment will be made in two tranches. At the closing of the transaction, the Vision Fund will invest in the first tranche of $900 million. When Cruise autonomous vehicles are ready for commercial deployment, the Vision Fund will complete the second tranche of $1.4 billion, subject to regulatory approval. SoftBank Vision Fund will own a 19.6-percent equity stake in GM Cruise.
“GM has made significant progress toward realizing the dream of completely automated driving to dramatically reduce fatalities, emissions, and congestion,” says Michael Ronen, managing partner at SoftBank Investment Advisers. “The GM Cruise approach of a fully integrated hardware and software stack gives it a unique competitive advantage. We are very impressed by the advances made by the Cruise and GM teams and are thrilled to help them lead a historic transformation of the automobile industry.”
The investments made by GM and SoftBank Vision Fund are expected to provide the capital necessary to reach commercialization at scale beginning in 2019.
“We’re excited to be joining forces with a tech leader who shares our belief that AV technology will change the world,” says Dan Ammann, president of GM. “We look forward to partnering with SoftBank as we work toward deploying this technology safely and in massive scale.”