Carmakers like GM are spending billions to ensure they don't get left behind.
As it turns out, it may not be a bad move for automakers to start investing in autonomous technology. And that's not just so car companies can secure a future in a driverless world, it's because autonomous vehicle technology is big business in the present day.
Proving it is news that General Motors' self-driving car division, Cruise, has just received a $1.15 billion investment from various parties, propelling the unit to a $19 billion valuation. In case you need reference, that's $2 billion more than Lyft's entire market cap and about one-third of GM's total market value, which sits at $54 billion, according to CNBC.
Cruise's most recent cash influx comes from its current investors, GM, Honda, Japan's Softbank, and a number of other institutional investors. The check-signing bonanza might seem excessive, but it cements just how important the race for a functional fully autonomous car is. It's becoming apparent that a few big players are dominating the field, and the one that wins could become the next tech behemoth whose name will sit alongside Google, Apple, and the like.
That's why big money is floating towards whichever company seems closest to building a functional and marketable version of the technology. As Cruise CEO Dan Ammann said, "Developing and deploying self-driving vehicles at massive scale is the engineering challenge of our generation." He added that, "Having deep resources to draw on as we pursue our mission is a critical competitive advantage."
Currently, Cruise is testing a fleet of autonomous Chevy Bolts on California and plans to put them into commercial use by the end of the year. To bolster its efforts and get its self-driving algorithms right, Cruise has also announced that it will expand into the Seattle area and hire 200 engineers before year's end. Of course, the race does not come without its struggles.
Cruise has quite a few of them in the form of formidable competitors like Uber and Google's Waymo. But if it can win the race to autonomy, the company, along with its investors and partners (like Honda), stand to win big. Maybe beyond big.
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