Cruise, a self-driving vehicle company that is majority-owned by General Motors, said a US national security panel has cleared a US$2.25 billion investment in the firm by Japan’s SoftBank, Reuters reports.
The Committee on Foreign Investment in the United States (CFIUS), which reviews deals for potential national security concerns, approved the Japanese investment, the report said.
The approval unlocks a seat for SoftBank on Cruise’s board, formalizing its oversight, and cements key financing for Cruise, which has raised US$7.25 billion in capital since last year.
“Today’s news is another important step toward achieving our goal to develop and deploy self-driving vehicles at massive scale,” Cruise CEO Dan Ammann said in a statement to Reuters.
The US$2.25 billion investment was unveiled by SoftBank in May 2018 amid a wave of investments by the Japanese technology and telecoms conglomerate in artificial intelligence, data analytics, financial services and self-driving cars.
According to a Reuters source, CFIUS gave the greenlight after fresh assurances that Cruise’s technology would be completely off limits to SoftBank.
The investment proposal raised red flags with the national security panel because SoftBank invests in numerous mobility units, some based in China, and encourages companies it invests in to share information.
CFIUS was especially concerned about SoftBank’s co-investments with Chinese social media and gaming giant Tencent Holdings, and its investment in China ride-hailing firm Didi, which it fears could take technology from Cruise, sources told Reuters.
The Cruise deal was structured to allow US$900 million of the investment to be disbursed initially, with the remainder provided once Cruise AVs are ready for commercial deployment and contingent on regulatory approval.
The two tranches would combine to give SoftBank a nearly 20 percent stake in Cruise.
Softbank’s investment, followed by Honda’s announcement in October that it will pour US2.75 billion into Cruise, is one of the biggest and most high-profile investments in self-driving technology to date.
GM Cruise and Alphabet’s Waymo are often described as leading the pack of technology and auto companies competing to create self-driving cars and integrate them into ride services fleets.
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