Walmart bets on GM's Cruise self-driving unit

Yahoo Finance Video
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Walmart joins the Cruise party as the latest investor in GM's Cruise autonomous division. Yahoo Finance's Pras Subramanian breaks it down.

Video Transcript

SEANA SMITH: Walmart is investing in GM's self-driving driving division called Cruise. We want to bring in Pras Subramanian to help us better understand exactly what this means. And Pras, just looking at the headline, this is a huge vote of confidence from Walmart in GM's division of Cruise.

PRAS SUBRAMANIAN: Yeah, the way I see it is everyone's joining the GM Cruise party, right? So, you know, GM's self-driving unit Cruise has huge investments from Microsoft and Honda and now Walmart, right? Part of a big $2.75 billion round. And this follows a five-month pilot program that Cruise has with GM in Arizona, where they're actually doing these self-driving deliveries.

I want to bring up a statement that Walmart CEO, US CEO John Furner said. He said the investment will aid our work towards developing a last mile delivery ecosystem that's fast, low cost, and scalable because the investment is a marker for us, which was a commitment to bring the benefit of self-driving cars to our customers and businesses.

This is a kind of a big point because some of the commercialization of autonomous technology, it's not been easy. We've seen people like-- or companies like Uber sell off that unit. You know, Waymo, Google's Waymo division, same. Problems with that, it's taken a lot longer to get going. So, like I said, it is really a strong vote of confidence in GM's tech here from Walmart.

ADAM SHAPIRO: Hey, Pras. When we talk about self-driving cars, we had the predictions about electric, all electric. You know, UBS saying by 2040, all new cars. Well, GM is going to beat it to 2035. When really are we going to have self-driving and be able to just hop into one?

PRAS SUBRAMANIAN: You know, there was a lot of kind of optimism in the industry rivalry. We're going to have the [INAUDIBLE] level five autonomy in, like, two or three years. But what we're seeing is a lot of these companies are having a lot of problems with the complexity of driving, the complexity of driving in local and in urban environments. And so I think what we're seeing is that companies like Cruise are seen as more of a longer term bet. You see GM talking about they're aspiring for 2035 as the year for EV.

So I think that is more of a longer term kind of play. Also this week, I want to note that Cruise signed a big deal with the governor of Dubai to be their exclusive provider of self-driving taxis. This deal goes to 2029. So we're seeing this kind of, like, this five to 10-year stretch for this type of technology.