GM's autonomous vehicle unit to get $2.25 billion boost from investment firm

UPDATED: 5/31/18 8:18 am ET - adds details, stock rising

DETROIT -- SoftBank Vision Fund, a prominent technology investment firm, will invest $2.25 billion in General Motors’ Cruise Automation autonomous vehicle operations.

The investment,  will provide the financial backing for the automaker’s previously announced plans to begin launching self-driving vehicles at scale in 2019.

GM shares surged in pre-market trading, rising 10 percent to $41.70 as of 8:15 a.m. ET.

“This is a very historic day when we look at the future of personal mobility. We are pleased to partner with Softbank,” GM CEO Mary Barra told media at the company’s headquarters. “We’re 100 percent committed to this mission and creating safe autonomous vehicles at large scale.”

The deal will give SoftBank Vision a 19.6-percent stake in GM Cruise, which includes Cruise and Strobe Inc., a lidar company GM acquired in October.

The investment values the operations at $11.5 billion.

As part of the deal, GM will also invest $1.1 billion in GM Cruise upon closing of the transaction, which is expected to close by the end of June. GM’s investment includes some of the automaker’s previously announced plan to invest $1.1 billion on autonomous vehicles in 2018. GM reports it has already invested upward of $500 million in the technology so far this year.

The investment from SoftBank Vision will be made in two installments. At the closing of the transaction, the Vision Fund will invest the first tranche of $900 million. At the time that Cruise AVs are ready for commercial deployment, the Vision Fund will complete the second tranche of $1.35 billion, subject to regulatory approval.

SoftBank Vision, which has substantial investments in other companies in this space such as software developer Nvidia Corp and ride-hailing giant Uber Inc., is a part of SoftBank Group Corp., a global conglomerate holding company based in Tokyo, Japan.

GM, through its Cruise Automation subsidiary, is considered to be a leader in the development and deployment of self-driving vehicles. It is currently testing the cars in several cities, including San Francisco, Calif.

Neither Barra nor GM President Dan Ammann provided additional details regarding where and when it plans to launch the fleets.

The automaker is producing the self-driving cars at its Orion Assembly plant in suburban Detroit. It is the only mass-production facility to be manufacturing such vehicles.

Cruise, from Dec. 1, 2016, to Nov. 30, 2017, drove 131,676 miles on San Francisco’s city streets in 94 Cruise AV cars, which are based on the Chevrolet Bolt EV.