Microsoft used to be a computer company. For the main part, it still is. Microsoft almost certainly made the software that runs your home PC or laptop. The company might even have made the browser that you’re using to read this article right now. Over the past decade or two, though, Microsoft has diversified. The most notable thing it’s done is dive headfirst into the video gaming industry. While Sony might still rule the roost with its PlayStation, Microsoft isn’t far behind with its Xbox. The machine is so popular that even now, at the time of writing, over two months since it was officially released, the Xbox Series X is still sold out almost everywhere across the world.
Not content with its strong presence in computing and video gaming, Microsoft has just shown its hand when it comes to its next big move. While some of its ‘big tech’ competitors have branched off into creating television channels or other entertainment pursuits, Microsoft has decided that it wants to get involved with us on a more personal level. To be more specific, it wants a big stake in the cars we drive. We’re not talking about any old cars, though. Microsoft has made a big-money investment in self-driving car technology.
We’ve been promised self-driving cars since the 1950s and 1960s when they were a staple of science-fiction shows and educational programs about the future. We’ve also seen several large companies (other than Microsoft) pump money into the concept in the recent past. Despite that, the closest most of us have ever got to a self-driving car is playing the “Light Racers” online slots game. Perhaps that’s a good metaphor for the whole experience. A player is never quite sure what they’re going to get from casino and slot games until they’ve placed their bets and spun the reels, and although some are delighted with the outcome, most find out that they’ve lost their money. More than one executive on more than one board must have felt like a defeated online slots player in recent years after spending money on self-driving car ideas and getting nowhere with them. Apparently, Microsoft believes it can do better – and it’s willing to put its money where its mouth is to prove it.
According to the reports we’ve seen this week, the total value of Microsoft’s investment in this new project is two billion dollars. It isn’t going it alone, though. The company has formed a partnership with Cruise – a subsidiary of General Motors – to bring self-driving cars to the market and make them a reality for the average customer. GM has already been working on several driverless car concepts via Cruise for many years but has either run out of money or decided that now is the time to seek external investment. Presumably, the idea is that the combination of GM’s car manufacturing experience and Microsoft’s technical know-how will give the joint venture a material advantage over every other company trying to bring a self-driving car to the table before the end of the 2020s. Might we expect to see the first self-driving cars in showrooms before then, though?
The issue of timing is one that Microsoft is currently being coy on. In a statement confirming the new partnership, the company describes its new alliance as a “long-term strategic relationship,” and interestingly also confirms that it won’t be an exclusive deal. Honda has also made large investments with Cruise in recent years, so the Japanese company is presumably still on board with whatever it is that Cruise has up its sleeve, but might more firms be tempted to join them? There has to be something about the prospects of the company that’s tempted Microsoft to make a move now. This is the first time they have ever shown any interest in the concept of driver-free vehicles, but we doubt it’s the first time anyone’s ever asked them to invest. From Cruise’s point of view, it’s an opportunity to use Microsoft’s ‘Azure’ software inside its cars. Microsoft’s incentive must be something else – something that the market isn’t currently aware of.
While Amazon is also known to be well along the road to producing a driverless car for commercial purposes, Microsoft’s biggest rival in this new endeavor is likely to be Waymo. Waymo is a subsidiary of Alphabet, which, to all intents and purposes, means Waymo is actually Google. The company has already started a driverless taxi service in Phoenix, Arizona, and hasn’t encountered any significant issues with that business model thus far. From Arizona, it’s expected that the service will spread out across the United States of America. Once the public is accustomed to taking taxi rides in cars with no drivers, they’re likely to be warmer to the idea of buying cars that don’t need a driver either. Waymo is generally perceived to be ahead of GM when it comes to getting a fully-approved, commercially-available driverless car to the market, and so Microsoft will have to hit the ground running if it wants to beat Google to the punch.
This isn’t to say that Cruise hasn’t already done some ‘real world’ testing with its own cars, because it has. The first Cruise cars were seen on the roads of San Francisco, California, toward the end of 2020. So far, though, the only people who’ve been allowed to ride in them are GM employees. The cars aren’t ready to be opened up to the general public yet – although we suspect that moment can’t be far away. The original plan was to launch a commercial driverless taxi service in 2019, but that date fell by the wayside, and a new one is yet to be confirmed.
At this point, it isn’t clear whether Microsoft’s involvement will be limited to providing tech behind the scenes or whether we can expect to see the famous Microsoft logo on the cars of the future. What we can say for sure, though, is that one of the biggest technology companies in the world has come off the sidelines, and that has to be a major advantage for GM. The battle to bring us the first commercial driverless car is on, and we’ll be very interested to see who wins the race!