Microsoft Takes $800M Hit After GM Shuts Down Cruise Robotaxi Program
Following GM's decision to discontinue its Cruise robotaxi program and integrate the technology into its own autonomous vehicle development, Microsoft has announced an $800 million impairment charge. This charge, related to Microsoft's 2021 investment in Cruise, will impact the company's second-quarter earnings.
GM, which owns a majority stake in Cruise, plans to increase its ownership to over 97% by buying back shares from minority investors. This move comes after Cruise raised $2 billion in 2021, with Microsoft as a key investor, valuing the company at $30 billion. The partnership also involved Cruise utilizing Microsoft's Azure platform for its robotaxi service. OpenAI also experienced a recent service disruption.
GM's decision marks a shift in strategy, moving away from robotaxis to focus on developing driver-assistance features and fully autonomous personal vehicles. This follows over $10 billion in investment since acquiring Cruise in 2016. Honda, another minority investor, has also withdrawn funding from its joint venture with GM and Cruise for a robotaxi service in Japan. For more on tech investments, see this article on potential tax implications.