Microsoft will take an $800M hit by shutting down Cruise robotaxi

GM’s decision to shut down its Cruise robotaxi program continues to roil the market, even with a few investors in the self-driving company.

Microsoft, which invested in Cruise in 2021, will take an $800 million fee as a result of GM’s actions, according to an official filing. Microsoft said the charge will be recorded in other income and expenses and was not included in the second quarter guidance provided on October 30, 2024. It is estimated to have a negative impact of diluted earnings of about $0.09 in the second quarter per share. to fill.

GM owns about 90% of Cruise. GM said it has agreements with several other shareholders to buy shares and increase its ownership to more than 97%. GM previously brought in a number of outside investors including Microsoft, Walmart, Softbank, T.Rowe Price and Honda as the company sought to raise the billions of capital needed to bring robotaxis to the public.

Cruise raised $2 billion in January 2021 in a round that included Microsoft and GM and partner Honda. That raise brought Cruise’s net worth to $30 billion. The two companies have also established a long-term partnership that includes plans for Cruise to use Azure, Microsoft’s cloud and edge computing platform, for its autonomous ride-hailing service.

General Motors announced Tuesday that it will no longer fund robot development and will instead take over its self-driving car subsidiary Cruise and combine it with the automaker’s efforts to develop driver-assistance features — and eventually fully autonomous cars. GM acquired self-driving startup Cruise in March 2016 for $1 billion. Since then, GM has spent more than $10 billion on the company in an effort to sell autonomous vehicle technology through the robotics business.

Several Honda investors said Wednesday they would stop backing General Motors and Cruise to launch a robot service in Japan.