GM Cruise Automation

Published: March 15, 2016

GM Cruise Automation, Cruise Automation is a San Francisco based startup with 10 employees. Today, all 10 have an extra spring in their step, especially founder Kyle Vogt, who dropped out of MIT in 2013 to sell an aftermarket system of sensors and software that allows late model Audi A4’s to drive themselves on the highway. According to Automotive News, the $10,000 system uses roof mounted radar and other sensors to control actuators for the car’s steering, brakes, and throttle.

This week, General Motors decided to buy the company outright. While GM will not confirm details of the transaction, reliable press reports suggest the purchase price is $1 billion. The deal is supposed to close in the second quarter of this year. In a statement, GM said it is buying Cruise automation for its “deep software talent and rapid development capability to further accelerate” GM’s development of autonomous vehicles.

GM is certainly not hanging around waiting for Elon Musk and his merry band to lead the way into the autonomous driving future. Just a few weeks ago, it announced it would invest a half billion dollars into ride sharing service Lyft.

GM initially planned an investment in the company but moved within five weeks to buy Cruise outright, said venture partner Nabeel Hyatt of Spark Capital, an investor in Cruise. “They moved faster than most Silicon Valley companies would move,” he said. Vogt impressed Silicon Valley venture capital fund Signia Venture Partners by demonstrating an Audi A4 that could be controlled by a game console, said Signia principal Sunny Dhillon.

Vogt told Reuters recently that his company is working on a system that will allow production cars to operate in fully autonomous mode. GM says Cruise Automation will remain based in San Francisco and operate independently within GM’s Autonomous Vehicle Development Team, created earlier this year and led by longtime engineering executive Doug Parks.

GM global product development chief Mark Reuss tells the press that GM will invest “significantly” in the Cruise team and its technology. “Cruise provides our company with a unique technology advantage that is unmatched in our industry,” he said. Newly minted billionaire Vogt says, “GM’s commitment to autonomous vehicles is inspiring, deliberate and completely in line with our vision to make transportation safer and more accessible.”

Is this a good deal for GM or just a boondoggle like the one that saw The General invest in Segway a few years ago? Is whatever Cruise Automation has worth a billion dollars? Doesn’t GM have some pretty sharp engineers on its payroll already? After all, the Volt and the Bolt didn’t just spring full grown from the brow of Bob Lutz. Tell us what you think about this acquisition in the comments section.


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