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General Motors (GM), Microsoft Ally on Driverless Technology

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General Motors (GM - Free Report) recently inked a long-term strategic relationship with Microsoft MSFT for its Cruise autonomous driving venture. The automaker will join forces with the tech giant to merge software and hardware engineering superiority, cloud-computing capabilities, and manufacturing expertise in order to transform the face of modern-day transportation and create a safer, cleaner and more accessible world. In fact, the partnership with Microsoft will help General Motors step up the commercialization of its self-driving technology.

Cruise, the self-driving car start-up, majorly owned by General Motors, is one of the leading names in the autonomous technology space. The California-based company secured the thumbs up late last year to test its self-driving vehicles in San Francisco without backup drivers. Reportedly, Microsoft will collaborate with General Motors, Honda HMC and institutional investors in a combined new equity investment of more than $2 billion in Cruise, ushering the post-money valuation of Cruise to $30 billion.

Per the latest agreement, Cruise has picked Microsoft as its preferred cloud provider. Cruise will take advantage of Azure, Microsoft's cloud and edge computing platform, to unravel the true potential of cloud computing for self-driving vehicles and commercialize its unique autonomous vehicles at large.

Microsoft will also explore Cruise's deep industry expertise to enhance its customer-driven product innovation and cater to transportation companies globally through continued investment in Azure.

Microsoft is a great inclusion to the General Motors team as the latter is aggressively working toward creating a world of zero crashes, zero emissions and zero congestion. Microsoft will aid the Detroit auto bigwig in speeding up the commercialization of Cruise's all-electric, self-driving vehicles, as the company is set to roll out 30 new electric vehicles globally by 2025.

The reality is that the automated driving landscape is taking much longer to develop than originally anticipated. The importance of adding a tech giant like Microsoft to the mix is to take leverage of its cloud computing power and the ability to analyze data from the vehicles to develop the technology faster.

In fact, General Motors will work with Microsoft to amplify its digital capabilities, including collaboration, storage, artificial intelligence and machine learning capabilities. This will, in turn, help the automaker foster its productivity and bring new mobility services to customers speedily.

Moreover, the latest partnership between General Motors and Microsoft is a classic example of auto companies teaming up and bringing technology firms on board to try spreading out the enormous costs and risks of developing self-driving and electric vehicles.

General Motors has always been at the forefront of the automotive revolution and is focused on its vision of an all-electric future. The latest partnership comes in at a time when the 112-year-old Detroit automaker is in the news for a series of announcements aimed at repositioning itself to better compete with electric vehicle behemoth Tesla TSLA and other top players.

General Motors has been aggressively revamping its brand name in its bid to be viewed as a green vehicle manufacturing company. This month, the automaker unveiled a new corporate logo to signify its aim to be fully electric vehicles, giving the company a new brand identity designed for a digital-first environment.

In addition, General Motors recently hosted a virtual unveiling of a futuristic flying Cadillac — a self-driving vehicle — which takes off and lands vertically, and carries the passenger above the streets and through the air. The company described this concept as “reimagining the future of personal transportation”.

General Motors currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of General Motors have appreciated 54.1% over the past year, underperforming the industry’s 296.3% rally.


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