GM buys Cruise Automation to speed self-driving car strategy

Fri Mar 11, 2016 1:44pm EST
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By Joseph White

(Reuters) - General Motors Co (GM.N: Quote) announced Friday it is buying Cruise Automation, a San Francisco self-driving vehicle startup, the latest move by the auto company as it competes with Silicon Valley to develop self-driving cars that could be used in ride-sharing fleets.

GM and Cruise did not disclose the value of the deal. Technology website Re/Code cited sources as saying GM paid $1 billion. A GM spokesman declined to comment on that figure.

GM intends to use Cruise’s technology and people to accelerate its effort to develop vehicles that can operate without a human driver, potentially as part of ride-sharing fleets “as soon as possible,” GM President Dan Ammann said in an interview.

“We will be committing considerable resources to recruit and grow the capability of the team,” Ammann said.

Cruise has been working to develop hardware and software that could be installed in a vehicle to enable the car to pilot itself on a highway, without the driver steering or braking.

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.

Cruise, which has 40 employees, was launched in 2013 and has raised $20 million in venture capital, founder Kyle Vogt said in an interview.   Continued...

The GM logo is seen at the General Motors Lansing Grand River Assembly Plant in Lansing, Michigan October 26, 2015. Photo taken October 26.   REUTERS/Rebecca Cook