Microsoft Drives Into the Autonomous Vehicles Industry With $2 Billion Investment in Startup Company Cruise

By James White Friday, January 22, 2021

In a corporate funding round on January 19, autonomous vehicles startup company Cruise was backed by tech giant Microsoft to the tune of $2 billion. As a result of the recent round, the San Francisco based-business raised $7.3 billion in total funding and was valued at $30 billion, putting the company into fierce competition with Waymo (also valued at $30 billion in 2020), a robotaxi business and subsidiary of Google parent company Alphabet Inc.

Microsoft storefront in New York City.

“Advances in digital technology are redefining every aspect of our work and life, including how we move people and goods,” Microsoft CEO Satya Nadella said. “As Cruise and GM’s preferred cloud, we will apply the power of Azure to help them scale and make autonomous transportation mainstream.”

Cruising Toward a Future of Driverless Cars

Founded by entrepreneurs Kyle Vogt and Dan Kan in 2013, the autonomous vehicle startup company seeks to change the way people commute and improve “the quality of life in our cities, starting with San Francisco.”

Prior to his involvement with Cruise, Vogt co-founded the successful streaming business, Twitch, which Amazon acquired for $1.1 billion. In 2016, Cruise’s startup was acquired by automotive manufacturing company GM for “north of $1 billion” in an undisclosed deal.

Today, the startup company uses an array of sensors and artificial intelligence (AI) tech in its electric vehicles to map and detect the environment around its users accurately while predicting the moves of those on the roadway still using steering wheels. However, the business had to delay testing last year amid the COVID-19 pandemic. In the meantime, the company struck up a contactless grocery delivery business deal with Walmart that allows for business operations to continue and the gathering of valuable data to proceed.

“That allowed us to stay on the road... while we made dramatic progress on simulation and off-road testing and development,” Dan Ammann, CEO of the startup company, said. “Against a backdrop of a year full of bad things, we’ve been positively surprised by the ability to continue work, continue productivity.”

As the sci-fi prospect of smart cities with driverless cars zooming around comes ever-closer to fruition, businesses, startup tech companies, and entrepreneurs all want a piece of the action. The global autonomous vehicle market size is predicted to reach $556.67 billion by the year 2026, with a compound annual growth rate (CAGR) of 39.47% from 2019 to 2026, according to a market research report.

Conclusions

Tech giant Microsoft throws $2 billion in funding behind autonomous vehicle startup Cruise, a GM subsidiary. As a result of the investment round, Cruise is set to compete with Waymo, a driverless vehicle subsidiary of Google parent company Alphabet, Inc. Both businesses will likely see great growth as the market for autonomous vehicles is projected to expand rapidly in the near future.

About the Author


Headshot for author James White

James White is a Michigan State University graduate with a B.S. in Environmental Biology. He is interested in reporting emerging trends in technology, especially with regard to alternative energy and environmental conservation.

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