GM shares soar on SoftBank investment

Japanese-based fund invests heavily in autonomous division to boost ride-hailing business

A fund affiliated with SoftBank Group of Japan plans to invest $2.25 billion (U.S.) in General Motors’ driverless-technology division to help the automaker ramp up a ride-hailing service and other new businesses.

As part of the deal announced Thursday, GM said it would put an additional $1.1 billion of its own money into the unit, known as GM Cruise Holdings. SoftBank’s investment will be made through its Vision Fund, which focuses on the technology sector.

“Our Cruise and GM teams together have made tremendous progress over the last two years,” Mary T. Barra, GM’s chairman and chief executive, said in a statement. “Teaming up with SoftBank adds an additional strong partner as we pursue our vision of zero crashes, zero emissions and zero congestion.”

The news caused GM shares to rise. In midday trading, GM shares were up more than 10 per cent, to nearly $42.

Earlier this year GM sought permission from the U.S. Department of Transportation to begin operating fully autonomous cars — without steering wheels or pedals — in a commercial ride-hailing service in 2019.

On Thursday, Barra said the agree- ment with SoftBank would give GM the capital it needs to introduce self-driving cars at a large scale.

The investment highlights the outsized ambition and seemingly bottomless wallet of SoftBank and its founder, Masayoshi Son. It was Son who came up with the idea of raising nearly $100 billion from investors ranging from Saudi Arabia to Apple for the Vision Fund, which instantly became one of the world’s biggest and boldest investors in tech companies.