Japanese telecom giant SoftBank will invest $2.25 billion (roughly Rs. 15,100 crores) in General Motors' autonomous car program in exchange for a stake in the venture, GM announced Thursday.
The infusion of cash is a vote of confidence in the big US automaker, which is competing with other carmakers and technology companies to introduce autonomous cars globally.
The investment from the SoftBank Vision Fund in the GM Cruise Holdings will be executed in two stages, with the first $900 million (roughly Rs. 6,100 crores) coming after the transaction is finalized and another $1.35 billion (roughly Rs. 9,100 crores) once GM vehicles are ready for commercialization.
GM has said it plans to commercialize its Cruise program in 2019 through ridesharing.
The announcement sparked a rally in GM shares, which jumped 11.5 percent to $42.16 (roughly Rs. 2,800) in pre-market trading.
"Our Cruise and GM teams together have made tremendous progress over the last two years," said GM chief executive Mary Barra.
"Teaming up with SoftBank adds an additional strong partner as we pursue our vision of zero crashes, zero emissions and zero congestion."
In exchange for the investment, SoftBank will hold a 19.6 percent stake in GM Cruise.
"GM has made significant progress toward realizing the dream of completely automated driving to dramatically reduce fatalities, emissions and congestion," said Michael Ronan, managing partner of SoftBank Investment Advisors.
"We are very impressed by the advances made by the Cruise and GM teams, and are thrilled to help them lead a historic transformation of the automobile industry."
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