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GM announced this week that it will no longer pursue the Cruise robotaxi business. (Cruise Photo)
Microsoft will take an $800 million charge on its investment in the Cruise robotaxi business after General Motors announced it would no longer fund the initiative as part of a shift in its autonomous driving strategy.
The Redmond, Wash.-based tech giant disclosed the charge Wednesday afternoon at the bottom of a Securities and Exchange Commission filing reporting the voting results from its annual shareholders meeting this week.
The charge will translate into an unexpected 9 cent reduction in the company’s earnings per share for the quarter ending Dec. 31. Wall Street analysts had expected Microsoft to report earnings of $3.14 per share for the quarter.
Microsoft announced its investment Cruise in 2021 as part of a larger strategic partnership between the companies that included work in hardware, software, and the cloud for autonomous vehicles. Microsoft joined GM and Honda and institutional investors in a new $2 billion investment in Cruise at the time.
GM owns about 90% of Cruise. A former Microsoft exec, Marc Whitten, was named CEO of Cruise earlier this year.
The automaker said this week that it will combine Cruise and its internal teams into a unified initiative to develop autonomous and assisted driving technologies.
“Consistent with GM’s capital allocation priorities, GM will no longer fund Cruise’s robotaxi development work given the considerable time and resources that would be needed to scale the business, along with an increasingly competitive robotaxi market,” GM said in its announcement.
Competitors include Alphabet subsidiary Waymo, which is expanding across the country; and Elon Musk’s Tesla working on its Cybercab service. Amazon is also in the running with its Zoox autonomous ride-hailing service.
