GM Soars After Soft Bank Invests $2.25BN In Its Driverless-Car Unit

Step aside Tesla and Uber: there is a new-selfdriving cool kid in town.

On Thursday morning, tech-investing giant SoftBank Vision Fund, which over the past year has been spending money like the Swiss National Bank buying US stocks on tilt, announced it would will invest $2.25 billion in General Motors Co.’s driverless-car unit valuing it at $11.5 billion, creating a new start in the ongoing fierce battle by tech companies and startups to become the first to commercialize autonomous vehicles.

SoftBank Vision Fund will take a 19.6% stake in GM Cruise Holding

GM said that the fund, an affiliate of Japan’s SoftBank Group, will take a 19.6% stake in GM Cruise Holdings LLC, a newly formed entity primarily made up of Cruise Automation, the driverless-car developer that GM acquired in early 2016 for around $1 billion.

The Vision Fund’s investment will be staggered, coming in two tranches: an initial $900 million payment, and another of $1.35 billion once Cruise’s autonomous vehicles are ready for commercial deployment.

The deal will provide not only a major financial backer - a la what Uber tried to do with Warren Buffett and failed - but will also "afford GM increased flexibility with respect to capital allocation" as it plows more money into developing a network of autonomous ride-share vehicles, targeted for sometime next year, GM said.

Opening the Cruise subsidiary to SoftBank’s giant fund allows it to access capital that investors have been reluctant to grant the 110-year-old auto maker. GM will retain an 80.4% stake in GM Cruise and invest $1.1 billion in the business.

During a press conference Thursday morning, GM Chief Executive Mary Barra called it a “landmark” investment that gives GM Cruise the capital it needs to get its driverless-car business to market

The biggest winners from today's announcement are GM shareholders like David Einhorm who finally get to see a major vote of confidence in their investment. For years, GM’s shares have languished as valuations for upstarts like electric-car maker Tesla and ride-share firm Uber soared on expectations of heady growth. GM stock surged over 10% in the pre-market.

 

Comments

snblitz Polynik3s Thu, 05/31/2018 - 16:31 Permalink

I would be okay with line following.

I think it was 25 years ago, that I and an associate were working on a line following car.

The government would lay down special lines on the road (can be invisible to the human eye) which the cars would follow.

The car had one other property which is that it used one of several technologies to determine the distance between itself and the car in front of it.

So you would be driving along doing the driving yourself and you would enter a lane that "allowed" for line following.

You would push the line following button on your dashboard and the car would follow the line, keeping itself a safe distance from the car in front of it braking if necessary.

The car would not change lanes, just follow the line and maintain a safe following distance.

Pretty cool.  Absolutely no car company thought this was a good idea.

Mostly people complained that maintaining the lines would be costly.

Do you know what Google said was the #1 problem for their self driving cars a couple years back?  The quality of the street markings.

 

In reply to by Polynik3s

silverer Thu, 05/31/2018 - 08:34 Permalink

Oh yeah. GM can do it. Because they've been so successful for so many years. After all, they've only had two bankruptcies. Musk with Tesla hasn't even had one (but it's coming). Oil up your wallets folks, two bailouts coming.

Mr. Guts Thu, 05/31/2018 - 08:44 Permalink

I'd say that GM is a better bet to pull this off over TSLA. GM can catch up to software faster than TSLA can catch up to 100 years of production line experience. 

youngman Thu, 05/31/2018 - 08:52 Permalink

I for one do not see this race for a driverless car making any sense.....the thrill of driving is why you buy a car....but I assume its for the Texting generation..they can still take selfies and post while going to their moms house

Bemused Observer youngman Thu, 05/31/2018 - 09:28 Permalink

It doesn't. Driverless cars are the biggest scam since tulip bulbs. Trouble is, a LOT of very wealthy investors have poured a TON of money into this idea, and they refuse to let it die.

They convinced themselves that the tech was inevitable, and ignored all the evidence that said it wasn't. But these morons will not go down without a fight. The mantra now is that the cars are great, it's the HUMAN DRIVERS that are the problem!

These fuckers will try to get US off the roads WE pay for so their investment pays off. Will they succeed? No, I think not. But they WILL make life difficult for everyone else around them until it sinks in that they've LOST.

Boo-fucking-hoo for them.

In reply to by youngman

Yogieu Thu, 05/31/2018 - 09:06 Permalink

I am software engineer, and I would not trust any self-driving car, ever. OK, I am full of appreciation for their current achievement in this area, pretty good job, but mistakes these algorithms do are not unexpected and I hardly see them being able to improve cars to a degree I would say it's safe to use such car without human attention. These cars can probably be used more or less safely on highways, and that's all. Urban environment is too difficult and unpredictable. If we want to be sure these cars do their job well, roads themselves would need to be prepared to guide these cars safely to destination of their choice. At that time I would start to think to use these cars on highways with feeling more or less safe. But as various videos show, just looking at white lanes on a road is not always sufficient.

Bemused Observer Yogieu Thu, 05/31/2018 - 10:06 Permalink

Basically, you need dedicated lanes. That's the only way these things get on the roads...Which would entail building a parallel highway system...LOL!

These vehicles CANNOT share the roads with human drivers, period. There is no program that could ever predict the range of possible human behaviors it will have to contend with, therefore, no such program can ever be written.

And the human drivers will NOT give up the roads to these vehicles...not by choice, and not by legislation.

The investors were had by a bunch of slick, fast-talking shysters who painted an overly optimistic picture in order to get them to part with their cash. Well, it's gone now, and we are no closer (in reality) to seeing all these things transpire.

But thanks for playing! I'm sure all that money spent reeeaal easy. As will the money they will continue to pour into this idea in a desperate effort to salvage it, both at the companies themselves, and at lawmakers to encourage them to pass favorable legislation. I can hear the lobbyists practicing in front of the mirror..."Sure, people will complain at first, but they'll go along with it in the end if you are firm...just keep hammering at the 'safety' issue, and at how bad humans are at driving. Remember, we wouldn't allow all these people to fly their own aircraft at will, are cars really that much different?"

Honestly? I don't think people are in the mood for this shit. Maybe they better get a grip, and back the fuck OFF for awhile...just sayin'...

In reply to by Yogieu

thebigunit Thu, 05/31/2018 - 14:42 Permalink

Self-driving ("driverless") cars are the future.

Eventually, humans will be deemed to be too unreliable and too dangerous to be driving on the same roads where self-driving cars a whizzing back and forth at 120 mph.

All the recent publicity about Tesla accidents is probably just GM, Apple, Uber and anyone else with a self-driving car trying to restrain Tesla's lead.