GM buys "Cruise" for $1B

General Motors has purchased “Cruise,” a small self-driving startup in San Francisco. Rumours suggest the price was over one billion dollars. In addition, other rumours have come to me suggesting that at least one other startup has been seeking a new round of funding at that valuation, but did not succeed due to the market downturn.

I gave Cruise some small assistance when they were getting started, and wrote about them when they showed off their first prototype. Since then, Cruise, as expected, moved away from highway autopilot retrofit into making a proper robocar, and their test Leaf has been running around SF with 4 velodyne LIDARs and other sensors for a while.

Even in my wildest dreams, I did not imagine startup valuations this high, this soon. (Time to get my own startup going.) Let’s consider why:

First, GM, as the world’s 2nd largest car company, is way behind on robocars. They were one of the first companies to announce a highway autopilot (called, ironically, “Super Cruise”) for the 2014 Cadillac. However, they quickly pulled back on that announced, and for the last few years have continued to delay it, recently announcing it would not even appear in the 2017 car, even though Mercedes, Tesla and several other companies had products like that.

GM’s main academic partner was CMU. They sponsored Boss, the CMU team that won the Darpa Urban Challenge, headed by Chris Urmson (who now leads the Google car project.) Recently, Uber moved into Pittsburgh in a big way and poached many of the top people from CMU for their project. This left GM with very little, a poor position for the world’s 2nd largest car company.

Next, we have Kyle Vogt, founder of Cruise. Kyle was on the founding team for justin.tv, and also for Twitch, which had a billion dollar acquisition — in other words, Kyle is not precisely hurting for money. He has not confirmed this to me, but I suspect when GM showed up at his door, he was not interested in joining a big car company, and his resources meant he was not in any hurry. I then presume GM took that as negotiation and bumped the price to where you would have to be crazy to say no.

GM will let cruise be independent, at least for now. That’s the only sane path. We’ll see where this goes.

Google seems to be way ahead

Google seems to be way ahead in the AI car race, with the resources to increase that lead. So this acquisition implies that GM did not think they could get favorable terms to work with Google. This implies a lower the probability that Google is pursuing an Android like open system for their AI car tech. That makes me sad.

Quick! Buy out the competition while you can!

I don't think it's too paranoid to see this as an anti-competitive move akin to the GM Streetcar Conspiracy 65 years ago (https://en.wikipedia.org/wiki/General_Motors_streetcar_conspiracy), and the demise of the first successful electric car since the early 20th century, also a GM affair.

I bought my first driving automation, a basic cruise control, as an aftermarket add-on from Sears, in 1978. Nowdays you can't get adaptive cruise control as an add-on. You have to get it as part of a factory-installed "technology package" for $5000 or more with other useless features like heated side mirrors and navigation systems that are worse than Google Maps, not to mention music systems that break if your library is more than 1000 tunes.

Autodrive systems from Cruise that work on anything except GM products are a threat to GM's top line. Expect them to quietly vanish in a few years.

Urban legend

Problem is that’s an urban legend, the majority of people who study it say that while GM and its group did try to monopolize the business, they wanted to own it, not kill it, and they were not responsible for the decline of street cars.

Besides, street cars are actually a pretty inefficient form of transportation. Now called light capacity rail, they tend to be grossly inefficient, and bus rapid transit is usually far more cost effective than light capacity rail.

Cruise was a just-getting-started venture, buying it will monopolize nothing.

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His name is Brad Templeton. You figure it out.
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