GM’s autonomous vehicle segment is getting an investment from SoftBank
Japanese company SoftBank’s $100 billion Vision Fund will invest $2.3 billion in auto giant General Motor’s (GM) autonomous vehicle unit. The automaker faces stiff competition in the race to roll out autonomous cars with tech companies like Uber, in which SoftBank already has a stake, and Alphabet’s (GOOG) Waymo, among others.
General Motors stock surged 10.4% in the early hours of normal trading on Thursday when the news came out. The Japanese company will be acquiring a 19.6% stake in GM’s autonomous vehicle unit. The deal was first reported by The Wall Street Journal.
Deal values GM Cruise at $11.5 billion
The autonomous vehicle division of the automaker that is receiving the investment is a separate company known as GM Cruise, an affiliate of GM. The company mainly consists of GM’s Cruise automation, which owns the technology.
GM acquired Cruise Automation for around $1 billion in 2016. SoftBank’s deal means GM Cruise will have a valuation of $11.5 billion, which goes to show how much more the self-driving technology is worth now after just two years.
Meanwhile, Waymo has announced that it’s strengthening its relationship with Fiat Chrysler (FCAU). The former is already using about 600 of Fiat Chrysler’s Pacifica plug-in hybrid vehicles to test its technology. On Thursday, Waymo said it will be employing an additional 62,000 Pacifica vans in its fleet.
Despite the massive gain on Thursday, GM’s stock is still up only 1.8% in 2018 and 12.8% in the last 12 months.