Cruise, General Motors Co.’s autonomous vehicle unit, today said that it has closed a more than $2 billion funding round at a $30 billion valuation from Microsoft Corp., Honda Motor Co. Ltd. and other investors.

Microsoft’s participation in the round comes as part of a broader partnership with GM that was detailed today as well. The companies didn’t share how much of the $2 billion investment was provided by the tech giant.

Under the partnership, Microsoft will become the preferred cloud provider for both Cruise and parent GM. The automaker said that it will use Microsoft’s cloud services to “accelerate its digitization initiatives” and explore opportunities to bring new mobility offerings to market. Cruise, in turn, will use Azure to support its autonomous vehicle development efforts.

Cruise last year debuted a self-driving van dubbed Origin that has no steering wheel or pedals. The vehicle uses an array of lidar sensors, radars, cameras and thermal imaging systems to see its surroundings, while an onboard AI module uses the collected data to make driving decisions.

Microsoft’s cloud deal with Cruise could potentially generate significant revenues for Azure. Developing self-driving car software requires enormous computing resources: Alphabet Inc.’s Waymo, a top Cruise rival, disclosed last March that its AI system was driving 20 million miles a day on virtual roads as part of simulations designed to increase the software’s accuracy. It’s plausible that Cruise, which relies on simulations for engineering as well, will move at least some of its software development workloads to Azure. 

That’s in addition to the applications parent GM may migrate to the cloud platform. GM, one of the world’s largest automakers, represents a high-profile addition to the list of enterprises that have chosen Microsoft as their preferred cloud provider.

GM Chief Executive Mary Barra said in a statement today that “Microsoft will help us accelerate the commercialization of Cruise’s all-electric, self-driving vehicles and help GM realize even more benefits from cloud computing as we launch 30 new electric vehicles globally by 2025.”

Microsoft’s newly acquired Cruise stake gives it a bigger foothold in the autonomous driving market, which is a focus for rival cloud providers as well. Google LLC has a presence in the  segment through sister company Waymo. Amazon.com Inc., in turn, last year spent $1.2 billion to acquire self-driving taxi developer Zoox.

Yet another Microsoft competitor, Apple Inc., is reportedly working on autonomous driving technology as well with a reported goal of making a passenger vehicle by 2024.

It’s possible that key competitors’ increasing focus on autonomous vehicles was one of the factors behind Microsoft’s decision to buy a stake in Cruise. If that’s the case, the company may eventually seek to take a more direct role in the market as its rivals have done, perhaps with a startup acquisition along the lines of Amazon’s purchase of Zoox. 

Photo: Cruise