In the wake of General Motors’ decision to halt Cruise’s robotaxi work, Microsoft has revealed that it will lose roughly $800 million as a result.
GM surprised the industry when it announced it was halting funding of Cruise’s robotaxi efforts, with plans to roll the division into the automaker’s broader tech teams. GM controls roughly 97% of Cruise, but said it planned to buy out the remaining 3% so that it could proceed with the division’s shutdown without hindrance.
Microsoft is one of Cruise’s minority owners and, as such, will take a loss as a result of GM’s plans. Microsoft revealed the news in an SEC filing.
In January 2021, Microsoft announced a minority investment in Cruise, an autonomous vehicle company which is a majority-owned subsidiary of General Motors Company (“GM”). On December 10, 2024, GM announced its intent to realign its autonomous driving strategy, no longer fund Cruise’s robotaxi development work, and pursue the acquisition of minority investor shares. As a result, we expect to record an impairment charge of approximately $800 million in the second quarter of fiscal year 2025. This charge will be recorded in other income and expense and was not included in our second quarter guidance provided on October 30, 2024. It is estimated to have a negative impact of approximately $0.09 to second quarter diluted earnings per share.
It’s unclear at this time what other companies will take a loss as a result of GM’s plans, or how much those losses may amount to. Nonetheless, Microsoft’s disclosure adds yet more intrigue to an already surprising development.
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