GM’s Exit From Robotaxi To Hit Tech Leader

The robotaxi market took a sharp turn this week with a surprising announcement from a major industry player.

GM acquired a majority stake in Cruise in 2016, three years after the autonomous driving (AV) startup’s launch. I Photo: Dllu Wiki

General Motors (GM), once seen as a formidable rival to Tesla in the race to deploy driverless cars, has decided to shut down its Cruise robotaxi division. This division was GM’s ambitious venture into self-driving, ride-sharing technology, The Street’s Samuel O’Brient reported.

GM acquired a majority stake in Cruise in 2016, three years after the autonomous driving (AV) startup’s launch.

Since then, the company has faced significant challenges, struggling to compete in the race to release driverless taxis. Following its decision to pivot away from ride-sharing, GM stock fell by 3%.

The fallout extends beyond GM. Regulatory filings reveal that Microsoft, one of the most prominent tech companies globally, has also been impacted.

Microsoft took a position in Cruise in 2021. In an 8K form filed with the SEC on December 10, the tech giant acknowledged GM’s decision to cease funding Cruise, stating: “We expect to record an impairment charge of approximately $800 million in the second quarter of fiscal year 2025. This charge will be recorded in other income and expense and was not included in our second-quarter guidance provided on October 30, 2024. It is estimated to have a negative impact of approximately $0.09 to second-quarter diluted earnings per share.”