Shares of General Motors Corp. shot into record territory on Tuesday, after the carmaker said it partnered with Microsoft Corp. to accelerate the commercialization of self-driving cars.
As part of the “long-term strategic relationship” Microsoft will join General Motors GM,
as well as Honda Motor Co. Ltd. HMC,
7267,
and institutional investors on a combined $ 2 billion new equity investment in GM’s self-driving car startup Cruise. GM said the investment brings Cruise’s “post-money valuation” to $ 30 billion.
GM’s stock rose 9.4% in morning trading, trading well above the record of $ 51.53 on Jan. 14. Microsoft shares MSFT,
rose 0.5%.
GM’s share is up 31.3% so far this year as investors reap the benefits of GM’s all-in-one move in the electric vehicle market. GM has outperformed other electric vehicle manufacturers for the year to date, as Tesla Inc. TSLA,
are up 18.6%, and China-based Nio Inc. NIO,
are up 17.4%.
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Cruise will use Microsoft’s Azure cloud platform to commercialize its autonomous vehicles on a large scale, while Azure will use Cruise’s industry expertise to enhance product innovation and serve its transportation customers.
“Microsoft is a great addition to the team as we move towards a future world of zero crashes, zero emissions and zero congestion,” said GM Chief Executive Mary Barra. “Microsoft will help us accelerate the commercialization of Cruise’s all-electric self-driving vehicles and help GM realize even more benefits from cloud computing as we launch 30 new electric vehicles worldwide by 2025 and create new businesses and services to drive growth. “
GM’s Cruise valuation is now approaching that of Ford Motor Co.F,
with a market capitalization of $ 40.3 billion. Also in the EV space, Nikola Corp.’s NKLA,
market capitalization is $ 7.7 billion.
Microsoft Chief Executive Satya Nadella said, “Advances in digital technology are redefining every aspect of our work and life, including how we move people and goods. As the preferred cloud for Cruise and GM, we will use the power of Azure to help them scale and make autonomous transportation mainstream. “
GM’s tock is up 64.0% in the last three months, while the S&P 500 index SPX,
has gained 10.5%.