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SoftBank Calls Shotgun with GM Driverless Bet



The Autonomous Transport Area is already the Wild West, and it has just become wilder.

The giant technology investment fund of the SoftBank Group Corp. has reached an agreement to inject $ 2.25 billion into the autonomous company of General Motors Co. in exchange for a 19.6 percent stake in a business now estimated at $ 11.5 billion. GM will own 80 percent of the new, semi-independent GM Cruise Holdings LLC. The investment is Cruise, the next year to bring self-driving cars on the road, a large chunk after.

The agreement announced on Thursday also complicates the already chaotic image of the actors in driverless cars. Google's parent company Alphabet Inc., GM, Uber Technologies Inc., Tesla Inc. and others are racing to develop driverless transports ̵

1; sometimes they work together, but often work against each other – and it has become a jumble of sometimes overlapping investments and Joint ventures led, abandoned partnerships and bruised feelings.

GM invested in Lyft, which subsequently attacked a driverless car with GM rival Ford. SoftBank now supports autonomous projects on both Uber and GM. Alphabet has done business with a number of competing automakers and owns part of Uber, which it also sued and accused of stealing Alpha's self-driving auto technology.

The disorder is unavoidable at this stage of development of autonomous transport is not a bullying candidate to dominate robotic vehicles. The jumble of players is basically a huge bet that more participants and a rich stew of allies and enemies will develop better technology and smarter strategies for it. Fingers crossed.

Of course there are winners and losers in every new development in the world of driverless cars. Securing betting by SoftBank is a definite advantage for GM. By Thursday, the automaker's stock had fallen 19 percent from its peak in October, with rising raw material costs and a break in production on pickups that weighed on profitability. The decline was a reminder that investors still see GM as a manufacturing company that has to deliver small things like revenue and spending targets that others (cough, Tesla, cough) have passed on. GM shares rose on Thursday morning on news from SoftBanks bet on Cruise.

Old School meets new school

GM shares rose by up to 12 percent in pre-IPO trading after announcement of SoftBank's involvement and helped cover some of their losses since their peak in October

Source: Bloomberg


Shareholders in old companies, especially those in which there have been many bankruptcies in the past, are rather impatient with digital reinvention. GM analysts expect the company to invest $ 8.5 billion this year, the highest since the 2009 bankruptcy. With SoftBank's investment, GM Cruise is now "funded to commercialization" GM President Daniel Ammann said on Bloomberg Television. That is a burden from the shoulders of investors.


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