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Jordan Perch loves automotive innovation and that is his ultimate passion. He is managing the resourceful and is an active contributor to numerous consumer and automotive blogs.

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GM Acquires Cruise Automation to Boost Autonomous Car Efforts

Posted April 13, 2016 5:54 AM by Jordan Perch
Pathfinder Tags: autonomous cars GM

American automakers have gotten much more serious about developing driverless vehicles lately, trying to avoid being left in the dust by the world's leading tech companies that are at the forefront of autonomous driving technology.

Ford Motor Company has created a new subdivision dedicated on the development of self-driving technologies, among other things, whereas General Motors will acquire another company that specializes in this area, following a $500 million investment in the popular ride-hailing service Lyft aimed at creating a fleet of autonomous vehicles providing on-demand rides.

Californian Driverless Car Startup

The Detroit automaker has announced that it has bought Cruise Automation, a startup based in Silicon Valley that has been focused on autonomous driving technology since its foundation in 2013.

"Fully autonomous vehicles can bring our customers enormous benefits in terms of greater convenience, lower cost and improved safety for their daily mobility needs," said GM President Dan Ammann.

GM says that it will fully own Cruise Automation, but it will be part of the car maker's Autonomous Vehicle Development Team, as an independent unit. It will be headed by Doug Parks, vice president of autonomous technology and vehicle execution with GM, and it will continue to operate at its headquarters in San Francisco.

Neither party disclosed the financial details of the deal, but Reuters cites media reports estimating it at about $1 billion.

Acquiring Talent and Technology

In the tech world, Cruise Automation has been best known for developing the $10,000 Cruise RP-1 system that could be added to cars as an aftermarket product, to give them various autonomous driving capabilities. After the product proved to be impractical and deemed too expensive to be affordable for the general consumer, the company decided to focus on developing fully-autonomous technologies.

The startup has 40 employees, and they are arguably just as important part of this acquisition for GM as the technology developed by Cruise Automation, in light of the war between Tesla, Google and Apple over autonomous vehicle engineers that has been going on lately.

"Cruise provides our company with a unique technology advantage that is unmatched in our industry. We intend to invest significantly to further grow the talent base and capabilities already established by the Cruise team," said Mark Reuss, GM executive vice president of Global Product Development, Purchasing and Supply Chain.

Cruise Automation, for its part, sees this deal as an opportunity to help bring self-driving cars closer to reality.

"GM's commitment to autonomous vehicles is inspiring, deliberate, and completely in line with our vision to make transportation safer and more accessible," said Kyle Vogt, founder of Cruise Automation. "We are excited to be partnering with GM and believe this is a ground-breaking and necessary step toward rapidly commercializing autonomous vehicle technology."

With this acquisition, General Motors' chances of catching up with the leading players in the driverless car race increase drastically and the Detroit car maker becomes the latest threat to a potential dominance of a Silicon Valley tech company in the future autonomous car market.


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