Microsoft, General Motors Strike Autonomous Vehicle Partnership: What Investors Need To Know

One of the world’s largest technology companies is teaming up with one of the world’s largest automotive manufacturers.

What Happened: General Motors Co GM and Microsoft Corporation MSFT are partnering on self-driving vehicles.

The companies will partner to bring together software and hardware engineering excellence, cloud computing capabilities and manufacturing capabilities.

The two companies said they will form a long-term strategic relationship to accelerate the commercialization of self-driving vehicles under General Motors brands.

Cruise will leverage Microsoft’s cloud computing platform Azure to commercialize its autonomous vehicle solution at scale.

Along with the partnership, Microsoft is investing alongside General Motors, Honda Motor Co HMC and institutional investors in a $2-billion round for the self-driving Cruise business division owned by General Motors.

Related Link: A Last Mile EV Delivery Van, Flying Cadillac Car Sends GM’s Stock To New Highs

Why It’s Important: The partnership brings together two giants in their respective fields. With the help of Microsoft and the ability to integrate Azure, General Motors could become a leader in self-driving automotive technology.

“Our mission to bring safer, better and more affordable transportation to everyone isn’t just a tech race — it’s also a trust race. Microsoft, as the gold standard in the trustworthy democratization of technology, will be a force multiplier for us as we commercialize our fleet of self-driving, all-electric, shared vehicles,” Cruise CEO Dan Ammann said in a statement. 

General Motors is working to launch 30 new electric vehicles globally by 2025, and the Cruise brand is one of several that is seen as key to this initiative.

With the new investment round for Cruise, the self-driving division is valued at $30 billion. General Motors acquired Cruise in 2016 and owns the majority of the company. The partnership with Microsoft and new investment round could lead to calls for General Motors to spin off the division to unlock shareholder value.

GM Price Action: Shares of General Motors were up 9.56% at $54.76 Tuesday. 

GM CEO Mary Barra. Benzinga file photo by Dustin Blitchok.