General Motors (NYSE: GM) shares skyrocketed during Thursday’s pre-market hours after Softbank Vision Fund announced it will invest $2.25 billion in GM Cruise Holdings (GM Cruise) to strengthen the company’s autonomous driving technology.
GM shares were up 11.68 percent during Thursday’s pre-market hours.
GM will also invest $1.1 billion upon closing of the transaction.
Softbank’s investment will be made into two tranches. At the closing, Softbank will invest the first tranche of $900 million. When the Cruise vehicles are ready for commercial deployment, the second tranche of $1.35 billion will be completed.
Softbank Vision Fund will now own a 19.6 percent equity stake in GM Cruise, subject to regulatory approval.
“Teaming up with SoftBank adds an additional strong partner as we pursue our vision of zero crashes, zero emissions and zero congestion.” said GM Chairman and CEO Mary Barra.
GM said its expects the investments into Cruise to provide necessary capital to reach commercialization by the beginning of 2019, allowing it to directly compete against giants in the industry.
Many technology companies and automakers have teamed up to push self-driving technology. Nvidia (NASDAQ: NVDA) is a major contributor in the field, as it already has partnerships with Volkswagen, Baidu, Aurora and Uber Technologies.
Advanced Micro Devices Inc. (NASDAQ: AMD) already has a partnership with Tesla Inc. (NASDAQ:TSLA). Google’s (NASDAQ: GOOGL) self-driving division, Waymo has partnered with Honda Motors Co. (NYSE: HMC).