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SoftBank Will Invest $2.25B in Cruise

110 points by sethbannon 8y ago

0x4f3759df 8y ago
Did anyone watch GTC 2018? NVidia has a self-driving software stack that they can drop into a 3D sim. Same stack works in the sim (ie real world has a real camera, sim world has a sim camera, real world has a real lidar, sim world has a sim lidar...) They will drive billions of sim miles with their stack. Hour 1 Minute 58 https://www.youtube.com/watch?v=95nphvtVf34 https://www.youtube.com/watch?v=95nphvtVf34
- dchuk 8y ago
  Isn't that what Waymo is doing already?
  - jacksmith21006 8y ago
    Yes for awhile. They have a virtual state of California they ride in and have more than a billion miles driving. Would be curious on accidents? Wish Waymo would share?
- PaulWaldman 8y ago
  This is common when writing software that interacts with real-world I/O.
samfisher83 8y ago
GM bought cruise for 1 billion. Softbanks stake would value it at 11 billion. Even if GM put in some money into cruise their return on investment seems pretty good.
- harigov 8y ago
  I think softbank isn't just a regular VC. My speculation is that it may provide other services like dealing with govt(s) that makes this offer even more compelling. Otherwise I don't see why GM would need an investment from softbank.
  - karthikb 8y ago
    It’s not always just about the money. One of the most effective ways to ensure that a long-term project stays alive at a big company as people come and go is to create an external tie-up or partnership.
  - endorphone 8y ago
    Since being bailed out, GM's debts have exploded once again, rapidly hitting the $100B mark with an average interest around 5%. A $2.5B cash infusion, and the added confidence, is very much something they would need.
  - Fricken 8y ago
    How much do you think a robotaxi costs to manufacture? I think it's a lowball estimate, but for argument sake, let's say they're each worth $150k. At that price $2.25 billion will get you 15,000 robotaxis, and that's far from the only expense. Waymo has announced a plan to deploy 20,000 vehicles in 2020, and that is what GM is up against. You just can't have enough money in the bank if you're comitted to a scaled commercial robotaxi deployment and are planning for world domination.
- barbegal 8y ago
  The investment today is only $0.9 billion with a further $1.35 billion at an unknown time in the future. This makes a present valuation of only $4.5 billion. And GM must commit $1.1 billion now. So GM will have invested a total of $2.1 billion for a share of Cruise which is valued at 80% of $4.5 = $3.6 billion.
  - trhway 8y ago
    >This makes a present valuation of only $4.5 billion. in 2 years from 1B->4.5B (with GM original stake of 1B growing 2.5x during those 2 years(4.5 - 1.1 - 0.9 = 2.5)). This is why i love tech. We call it "only" here.
repsilat 8y ago
For a man on the street to invest in Cruise, would he need to invest in GM? (Or "invest in GM and short Ford" or something?) It sounds like they're serious business, but I don't want to dilute a bet on self-driving cars with a bet on consumer trucks.
- jonknee 8y ago
  Yes, which is up over 10% on this news. The good news is consumer trucks are massively profitable which can fund making autonomous vehicles.
  - zitterbewegung 8y ago
    All the American car makers only really sell trucks and all of the other Cars don't make up much money on their balance sheet.
indescions_2018 8y ago
Subtext here is that Cruise's driverless product is done. And the cash wont be spent on further R&D. But on go-to-market strategy. Ultimately culminating in the public rollout of a fleet for major markets. Perhaps centered around the Bolt EV 5-door subcompact. The seismic shift in marketing will be fascinating. From the freedom evoked by taking hairpin curves with the wind tossing your hair about. To a focus on the hardships and hidden costs of car ownership. As passenger attention shifts from watching the road and scenery. To focusing on windowpane display screens. Expect to see branded partnerships with Disney / Netflix. As well as content specifically formulated to entertain or shop during the 20 minute car trip ;)
- jonknee 8y ago
  > As passenger attention shifts from watching the road and scenery. Why would it shift from scenery? Not having to watch the road means you're free to take in the views. That same classic PCH car shot can be done while looking to the ocean instead of straight ahead.
- wil421 8y ago
  I’m sorry but I disagree. Driverless cars are a pipe dream at this point. A lot of people are going to die and legislation will catch up eventually. The tech isn’t even standardized with everyone taking different approaches. The article about TI millimeter wave radar that’s was on the front page shed some light. I’m sure this won’t be popular on HN. The Uber crash gave some insight on the real state of things. Tesla is in full PR mode even getting banned from the recent crash’s investigation.
  - floathub 8y ago
    I could not agree more. Softbank and the investment community may just be in greater fool mode. Or, to be more generous, perhaps they are taking a long term approach. But anything close to Level 4/5 is a _long_ way away, as even senior technical folks have been admitting recently.
    - Fricken 8y ago
sethbannon 8y ago
Cruise strikes me as the ideal acquisition, and a formula others should copy. Kyle Vogt and the rest of the Cruise founding team got personal liquidity; a huge influx of capital to continue R&D; access to GM's marketing, manufacturing, and talent infrastructure; but retain general independence in the pursuit of the ultimate mission of self-driving cars. Pretty impressed with GM for having the insight to understand that arrangement was best and the flexibility to pull it off. And incredibly impressed with what Kyle and his team have achieved post-acquisition. They clearly remain as hungry to make this happen as on day 1.
- criticali 8y ago
  really? have a friend who interviewed there pre GM acquisition. said it was a colossal joke of a place, engineering wise. and hes worked at some sh*thole startups, so i take his word for it. honestly, it was 100% luck GM took notice of them. weren't many other alternatives around at that time. GM buying them spurred the explosion of self-proclaimed software/full stack self driving startups we see today. So Im not as impressed with the achievements so far as I am with the absolute dumb luck these guys have had. Kudos, i guess.
  - makes_me_go_hmm 8y ago
    I've noticed that when cruise articles pop up here on HN they reliably provoke someone to create a new account express this sentiment. Previous examples are this account: https://news.ycombinator.com/threads?id=tmpnam1234567 https://news.ycombinator.com/threads?id=tmpnam1234567 and this user _Fricken: https://news.ycombinator.com/threads?id=_Fricken https://news.ycombinator.com/threads?id=_Fricken, who based on choice of username seems to actually be impersonating the submitter of this thread. As to the validity of the criticism I have no idea, but it strikes me as very odd. edit: Fricken (no underscore) didn't actually submit this, but submitted the same article and is here in the comments.
    - dang 8y ago
      It's all the same person. In addition to having a 'friend' who 'interviewed' at Cruise, they've been an 'engineer' at Cruise, a 'founder' of Cruise, and also the 'cofounder' who left. We've banned all the trolling accounts we know about and their main account as well.
creddit 8y ago
Large investments in all the major ride sharing companies + large investment in Cruise, Softbank is becoming, in the background, the future of transportation. By networking all these companies together, preventing cross-market competition and supplying self-driving tech to their players, their market power can be seen to be pretty massive.
- THE_PUN_STOPS 8y ago
  Don’t forget Boston Dynamics... my dream of riding around town on a fuel cell powered BigDog may yet come to pass. Yeehaw!
rdlecler1 8y ago
GM’s head of business development is looking pretty smart right now.
Roritharr 8y ago
Sometimes I wish Deutsche Telekom would go head to head with Softbank in doing these kinds of Investments and Aquisitions. Not because I think they'd be good at it, but more for the fact that this would give Germany a real chance for a seat at the table of future tech-giants.

110 points by sethbannon 8y ago

Did anyone watch GTC 2018? NVidia has a self-driving software stack that they can drop into a 3D sim. Same stack works in the sim (ie real world has a real camera, sim world has a sim camera, real world has a real lidar, sim world has a sim lidar...) They will drive billions of sim miles with their stack. Hour 1 Minute 58 https://www.youtube.com/watch?v=95nphvtVf34 https://www.youtube.com/watch?v=95nphvtVf34

dchuk 8y ago
Isn't that what Waymo is doing already?
- jacksmith21006 8y ago
  Yes for awhile. They have a virtual state of California they ride in and have more than a billion miles driving. Would be curious on accidents? Wish Waymo would share?
PaulWaldman 8y ago
This is common when writing software that interacts with real-world I/O.

samfisher83 8y ago

GM bought cruise for 1 billion. Softbanks stake would value it at 11 billion. Even if GM put in some money into cruise their return on investment seems pretty good.

harigov 8y ago
I think softbank isn't just a regular VC. My speculation is that it may provide other services like dealing with govt(s) that makes this offer even more compelling. Otherwise I don't see why GM would need an investment from softbank.
- karthikb 8y ago
  It’s not always just about the money. One of the most effective ways to ensure that a long-term project stays alive at a big company as people come and go is to create an external tie-up or partnership.
- endorphone 8y ago
  Since being bailed out, GM's debts have exploded once again, rapidly hitting the $100B mark with an average interest around 5%. A $2.5B cash infusion, and the added confidence, is very much something they would need.
- Fricken 8y ago
  How much do you think a robotaxi costs to manufacture? I think it's a lowball estimate, but for argument sake, let's say they're each worth $150k. At that price $2.25 billion will get you 15,000 robotaxis, and that's far from the only expense. Waymo has announced a plan to deploy 20,000 vehicles in 2020, and that is what GM is up against. You just can't have enough money in the bank if you're comitted to a scaled commercial robotaxi deployment and are planning for world domination.
barbegal 8y ago
The investment today is only $0.9 billion with a further $1.35 billion at an unknown time in the future. This makes a present valuation of only $4.5 billion. And GM must commit $1.1 billion now. So GM will have invested a total of $2.1 billion for a share of Cruise which is valued at 80% of $4.5 = $3.6 billion.
- trhway 8y ago
  >This makes a present valuation of only $4.5 billion. in 2 years from 1B->4.5B (with GM original stake of 1B growing 2.5x during those 2 years(4.5 - 1.1 - 0.9 = 2.5)). This is why i love tech. We call it "only" here.

repsilat 8y ago

For a man on the street to invest in Cruise, would he need to invest in GM? (Or "invest in GM and short Ford" or something?) It sounds like they're serious business, but I don't want to dilute a bet on self-driving cars with a bet on consumer trucks.

jonknee 8y ago
Yes, which is up over 10% on this news. The good news is consumer trucks are massively profitable which can fund making autonomous vehicles.
- zitterbewegung 8y ago
  All the American car makers only really sell trucks and all of the other Cars don't make up much money on their balance sheet.

indescions_2018 8y ago

Subtext here is that Cruise's driverless product is done. And the cash wont be spent on further R&D. But on go-to-market strategy. Ultimately culminating in the public rollout of a fleet for major markets. Perhaps centered around the Bolt EV 5-door subcompact. The seismic shift in marketing will be fascinating. From the freedom evoked by taking hairpin curves with the wind tossing your hair about. To a focus on the hardships and hidden costs of car ownership. As passenger attention shifts from watching the road and scenery. To focusing on windowpane display screens. Expect to see branded partnerships with Disney / Netflix. As well as content specifically formulated to entertain or shop during the 20 minute car trip ;)

jonknee 8y ago
> As passenger attention shifts from watching the road and scenery. Why would it shift from scenery? Not having to watch the road means you're free to take in the views. That same classic PCH car shot can be done while looking to the ocean instead of straight ahead.
wil421 8y ago
I’m sorry but I disagree. Driverless cars are a pipe dream at this point. A lot of people are going to die and legislation will catch up eventually. The tech isn’t even standardized with everyone taking different approaches. The article about TI millimeter wave radar that’s was on the front page shed some light. I’m sure this won’t be popular on HN. The Uber crash gave some insight on the real state of things. Tesla is in full PR mode even getting banned from the recent crash’s investigation.
- floathub 8y ago
  I could not agree more. Softbank and the investment community may just be in greater fool mode. Or, to be more generous, perhaps they are taking a long term approach. But anything close to Level 4/5 is a _long_ way away, as even senior technical folks have been admitting recently.
  - Fricken 8y ago

sethbannon 8y ago

Cruise strikes me as the ideal acquisition, and a formula others should copy. Kyle Vogt and the rest of the Cruise founding team got personal liquidity; a huge influx of capital to continue R&D; access to GM's marketing, manufacturing, and talent infrastructure; but retain general independence in the pursuit of the ultimate mission of self-driving cars. Pretty impressed with GM for having the insight to understand that arrangement was best and the flexibility to pull it off. And incredibly impressed with what Kyle and his team have achieved post-acquisition. They clearly remain as hungry to make this happen as on day 1.

criticali 8y ago
really? have a friend who interviewed there pre GM acquisition. said it was a colossal joke of a place, engineering wise. and hes worked at some sh*thole startups, so i take his word for it. honestly, it was 100% luck GM took notice of them. weren't many other alternatives around at that time. GM buying them spurred the explosion of self-proclaimed software/full stack self driving startups we see today. So Im not as impressed with the achievements so far as I am with the absolute dumb luck these guys have had. Kudos, i guess.
- makes_me_go_hmm 8y ago
  I've noticed that when cruise articles pop up here on HN they reliably provoke someone to create a new account express this sentiment. Previous examples are this account: https://news.ycombinator.com/threads?id=tmpnam1234567 https://news.ycombinator.com/threads?id=tmpnam1234567 and this user _Fricken: https://news.ycombinator.com/threads?id=_Fricken https://news.ycombinator.com/threads?id=_Fricken, who based on choice of username seems to actually be impersonating the submitter of this thread. As to the validity of the criticism I have no idea, but it strikes me as very odd. edit: Fricken (no underscore) didn't actually submit this, but submitted the same article and is here in the comments.
  - dang 8y ago
    It's all the same person. In addition to having a 'friend' who 'interviewed' at Cruise, they've been an 'engineer' at Cruise, a 'founder' of Cruise, and also the 'cofounder' who left. We've banned all the trolling accounts we know about and their main account as well.

creddit 8y ago

Large investments in all the major ride sharing companies + large investment in Cruise, Softbank is becoming, in the background, the future of transportation. By networking all these companies together, preventing cross-market competition and supplying self-driving tech to their players, their market power can be seen to be pretty massive.

THE_PUN_STOPS 8y ago
Don’t forget Boston Dynamics... my dream of riding around town on a fuel cell powered BigDog may yet come to pass. Yeehaw!

rdlecler1 8y ago

GM’s head of business development is looking pretty smart right now.

Roritharr 8y ago

Sometimes I wish Deutsche Telekom would go head to head with Softbank in doing these kinds of Investments and Aquisitions. Not because I think they'd be good at it, but more for the fact that this would give Germany a real chance for a seat at the table of future tech-giants.