The Cruise robotaxis service has just been shut down by General Motors, which bought the startup in 2016 for $1 billion. A decision that will cause a certain Microsoft to lose a significant amount of money…
800 million losses…
On December 10, the American automobile giant permanently closed the operations of its subsidiary, causing the Redmond firm to lose $800 million in value. In 2021, the latter participated, alongside Honda, in Cruise’s fundraising to the tune of $2 billion. The operation valued it, at the time, at $30 billion.
An investment which marked the start of a long-term partnership between the two companies. Objective : integrate Microsoft Azure into Cruise’s autonomous driving service. A collaboration that will never see the light of day. The loss for the software giant will be recorded in its other income and expenses. It was not included in its second-quarter guidance, but is expected to have a negative impact of approximately $0.09 on second-quarter diluted earnings per share, according to a regulatory document.
A serious accident in 2023
Before October 2023, Cruise operated autonomous taxis without safety drivers in San Francisco, Phoenix and Austin, so much so that it was even ahead of its biggest rival, Waymo.
However, a very serious accident involving one of its vehicles dealt a serious blow to the company, as it failed to spot a woman thrown onto its road after being knocked down. Dragged for around twenty meters, the victim almost lost his life. In the process, Cruise’s management left the ship, while the head of its parent company General Motors announced a major restructuring which would lead to the resumption of its activities. In the end, this is not the case.
“ GM is committed to delivering the best driving experiences to our customers in a disciplined and capital-efficient manner. Cruise was an early innovator in autonomy, and the deeper integration of our teams, coupled with GM’s strong brands, scale and manufacturing strength, will help advance our vision of the future of transport », Explained Mary Barra, the CEO of the manufacturer.
Thus, the company is pivoting towards the development of autonomous driving for individuals, officially abandoning the autonomous taxi sector.
- Microsoft will suffer a loss in value of $800 million following the shutdown of Cruise.
- The Redmond firm had invested in the company in 2021, and they had even established a long-term strategic partnership.
- Cruise was a big rival to Waymo in the autonomous taxi space.
