Microsoft (NASDAQ:MSFT) is taking a huge gamble on self-driving technology with a newly inked agreement with General Motors (NYSE:GM) and Cruise.
Cruise and GM announced on Tuesday that they have agreed to a “long-term relationship” with the software company to “hasten the success” of autonomous-vehicle products.
Microsoft is allying with GM, along with Honda Motor, and institutional backers in a brand new fund raising round of more than $2 billion that increases Cruise’s valuation to over $30 billion, the companies announced.
Cruise’s electric (and self-driving) taxis will utilize Microsoft’s Azure cloud-computing services.
Under the agreement, Cruise will release its autonomous vehicles using Microsoft’s Azure, and GM will use Azure as its own cloud provider. To reciprocate, Microsoft will use the expertise from Cruise and GM to increase Azure’s market share in the transportation industry.
Cruise’s leader and CEO Dan Ammann, applauding Microsoft as “the standard of trustworthiness and democratization of technology,” said the software giant will be their “force multiplier” as they move to release their fleet of self-driving taxis.
For Microsoft, the ability to work along side Cruise — and to claim GM as a long-term customer — helps its continuing push to win against cloud competitors like Amazon‘s AWS and gives it a foot in the autonomous-vehicle door as a player in an industry that is heading for mainstream adoption.
For Cruise on the other hand, it’s another big ally that could help push it higher — both in investors’ eyes but also in terms of technology.
Details of the timing and size of Microsoft’s stake in Cruise has not yet yet been revealed.