GM Will Pay $1 Billion For Cruise Automation, An Autonomous Driving Startup

Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!

Originally published on Gas2.

Cruise Automation is a San Francisco based startup with 10 employees. Today, all 10 have an extra spring in their step, especially founder Kyle Vogt, who dropped out of MIT in 2013 to sell an aftermarket system of sensors and software that allows late model Audi A4’s to drive themselves on the highway. According to Automotive News, the $10,000 system uses roof mounted radar and other sensors to control actuators for the car’s steering, brakes, and throttle.

Cruise-AutomationThis week, General Motors decided to buy the company outright. While GM will not confirm details of the transaction, reliable press reports suggest the purchase price is $1 billion. The deal is supposed to close in the second quarter of this year. In a statement, GM said it is buying Cruise automation for its “deep software talent and rapid development capability to further accelerate” GM’s development of autonomous vehicles.

GM is certainly not hanging around waiting for Elon Musk and his merry band to lead the way into the autonomous driving future. Just a few weeks ago, it announced it would invest a half billion dollars into ride sharing service Lyft.

GM initially planned an investment in the company but moved within five weeks to buy Cruise outright, said venture partner Nabeel Hyatt of Spark Capital, an investor in Cruise. “They moved faster than most Silicon Valley companies would move,” he said. Vogt impressed Silicon Valley venture capital fund Signia Venture Partners by demonstrating an Audi A4 that could be controlled by a game console, said Signia principal Sunny Dhillon.

Vogt told Reuters recently that his company is working on a system that will allow production cars to operate in fully autonomous mode. GM says Cruise Automation will remain based in San Francisco and operate independently within GM’s Autonomous Vehicle Development Team, created earlier this year and led by longtime engineering executive Doug Parks.

GM global product development chief Mark Reuss tells the press that GM will invest “significantly” in the Cruise team and its technology. “Cruise provides our company with a unique technology advantage that is unmatched in our industry,” he said. Newly minted billionaire Vogt says, “GM’s commitment to autonomous vehicles is inspiring, deliberate and completely in line with our vision to make transportation safer and more accessible.”

Is this a good deal for GM or just a boondoggle like the one that saw The General invest in Segway a few years ago? Is whatever Cruise Automation has worth a billion dollars? Doesn’t GM have some pretty sharp engineers on its payroll already?  After all, the Volt and the Bolt didn’t just spring full grown from the brow of Bob Lutz. Tell us what you think about this acquisition in the comments section.

Reprinted with permission.

Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.

CleanTechnica Holiday Wish Book

Holiday Wish Book Cover

Click to download.

Our Latest EVObsession Video

I don't like paywalls. You don't like paywalls. Who likes paywalls? Here at CleanTechnica, we implemented a limited paywall for a while, but it always felt wrong — and it was always tough to decide what we should put behind there. In theory, your most exclusive and best content goes behind a paywall. But then fewer people read it!! So, we've decided to completely nix paywalls here at CleanTechnica. But...
Like other media companies, we need reader support! If you support us, please chip in a bit monthly to help our team write, edit, and publish 15 cleantech stories a day!
Thank you!

CleanTechnica uses affiliate links. See our policy here.

Steve Hanley

Steve writes about the interface between technology and sustainability from his home in Florida or anywhere else The Force may lead him. He is proud to be "woke" and doesn't really give a damn why the glass broke. He believes passionately in what Socrates said 3000 years ago: "The secret to change is to focus all of your energy not on fighting the old but on building the new."

Steve Hanley has 5251 posts and counting. See all posts by Steve Hanley

7 thoughts on “GM Will Pay $1 Billion For Cruise Automation, An Autonomous Driving Startup

  • Don’t know much about the Cruise Automation technology but $1billion sure sounds like a hefty sum.

    • I’m guessing there are some golden handcuffs in that deal for the 10 employees.

      • Those poor sob’s will have to pay 28% of $100,000,000 first thing to the IRS. They should buy a Tesla and get the $7500 federal tax credit.

        • Marginal tax rates should be higher.

          It should be harder to earn the second million than the first million and harder to earn the third than the second. We’ve got things turned around the wrong way.

  • Yeah, bring on those golden handcuffs. I can’t get over this sum. This intellectual property better be very good! Maybe it is.

    It’s not nearly as ridiculous as constellation beverage paying a billion for Ballast Point brewing, who makes great beer but barriers to entry for a great IPA are very low. At least Cruise Automation could theroretically have great IP.

    10 people. Damn. Dr Evil, with little finger in mouth….

  • GM continues to pull ultra expensive blunders, then ‘we the people’ write them billion dollar checks. Maybe if we stop writing the checks they’ll save the Titanic.
    Musk is a software writer first, a car builder and rocket scientist 2nd. He’s about to do to automated driving software what Bill Gates and Microsoft did to PCs. He’s going to establish a platform, that everyone will share for free at first, no patents. Hee hee, it’s all so obvious. Meanwhile, back at the ICE ranch, GM (IBM and Bill Gates story) knows there is something important about software and cars so they invest $1 Billion right away. But the software they buy is designed to run ICE cars. When Bill zinged IBM is was because IBM thought the “money was in the hardware”. This is 25 years later so it’s all software but the ICE system has to run all sorts of mechanical bits and pieces, whereas the Tesla stuff is all digital. Night and day.

    • GM had no role in the financial meltdown that required their bailout.

      GM had been improving the quality of its cars, introducing more efficient models and had started selling the Volt.

      Lack of adequate regulation for large financial institutions and the Bush administration not paying attention to what was happening caused GM’s problem.

      If you’ve paid any attention to the software world a billion dollars is a pretty common price to pay for someone’s programs that work. The EV/ICEV stuff is not important. What GM is buying is the ability for cars to drive themselves. GM, and other car companies, already have the software that controls the ICE.

Comments are closed.