Autonomous Driving

GM’s Autonomous Driving Strategy

cruise automationGM’s reported $1B acquisition (cash, stock & retention incentives) of autonomous-driving startup, Cruise Automation, marked a distinct change in the auto-maker’s strategy. You can read the WSJ report on the deal here and a more recent Forbes article here. Earlier, this year,  GM had announced that it would invest $500 million in Lyft Inc and laid out plans to develop an on-demand network of self-driving cars with the ride-sharing service. Indeed, according to this Forbes article, GM wants to buy the whole company, but Lyft isn’t interested. What exactly did they get with Cruise Automation? Firstly, they were way behind their competitors in terms of autonomous driving & needed to do something to catch up. That something was a startup called Cruise Automation, which had about 40 employees back in March. This interview conducted (prior to the GM acquisition) with Kyle Vogt, the founder of Cruise Automation, provides some excellent detail on what the company had been working on- “their plan was to sell their RP-1 aftermarket kit, which will convert any Audi A4 or S4 to a self-driving car, for $10,000. Eventually, Vogt says, it will work with any vehicle.” Cruise Automation is (understandably) coy about the details of its self-driving technology- but it’s reasonable to assume that they were working with off-the-shelf components (sensors+CPU/GPU). So what made the company so valuable to GM? Most likely, two things. First the talented team. The purchase price included a very significant component that was tied to employee retention. Secondly, software. In reality, the sensors required for low-cost autonomous driving already exist. What really matters is how you tie the vast amounts of information together to make the decisions that are required to steer, accelerate and brake the car. That requires some very advanced algorithms and likely a good deal of Artificial Intelligence.

To schedule a consultation on autonomous driving, please get in touch at william.keating@semiconalpha.com