Microsoft Faces $800 Million Loss Following GM Cruise Robotaxi Shutdown
Microsoft takes a massive $800 million impairment charge after General Motors abruptly ends its Cruise robotaxi program. The financial hit drops the tech giant's quarterly earnings per share by approximately nine cents.
Microsoft faces an $800 million impairment charge after General Motors shuts down its Cruise robotaxi program. The tech giant originally invests in the self-driving company in 2021, but GM's recent decision to absorb Cruise and pivot to personal vehicle technology drastically devalues that stake. Microsoft records this financial hit in its second-quarter expenses, reducing its diluted earnings per share by approximately $0.09.
General Motors currently owns about 90% of Cruise and actively buys back shares from minority investors to push its ownership past 97%. The original 2021 funding round raises $2 billion and values Cruise at $30 billion, drawing major investments from Microsoft, Walmart, SoftBank, T. Rowe Price, and Honda. That same deal also establishes a strategic partnership for Cruise to utilize Microsoft's Azure cloud platform for its autonomous ride-hailing service.
The fallout extends beyond Microsoft, as Honda also announces it stops funding a joint venture with GM and Cruise to launch a robotaxi service in Japan. GM acquires the original Cruise startup in 2016 for $1 billion and spends over $10 billion trying to commercialize the robotaxi concept. Now, the automaker completely abandons the ride-hailing model to focus exclusively on developing driver assistance features for personally owned vehicles.