GM’s Stock Zooms as Cruise Automation Unit Lands $2.3 Billion Investment

Japan’s SoftBank Vision Fund is investing $2.3 billion in General Motors Co.’s Cruise Automation unit. GM is contributing another $1.1 billion.

News of the SoftBank investment caused a GM’s stock price to surge nearly 13% to close at $42.70 on Thursday. It was the stock’s biggest one-day gain since GM emerged from bankruptcy in 2009.

Cruise Automation will use the new funding to further develop and commercialize GM’s self-driving vehicle systems. The carmaker aims to introduce driverless taxis next year in an unnamed U.S. city.

SoftBank will provide the funds in two installments, starting with $900 million in a deal that’s expected to close by the end of June. The remaining $1.4 billion will be provided when GM’s autonomous vehicles are ready for commercial deployment, according to the carmaker. The combined investments will give SoftBank Vision  a nearly 20% stake in GM Cruise Holdings LLC, which oversees Cruise Automation and newly acquired lidar specialist Strobe Inc.

SoftBank’s investment values GM Cruise at $11.5 billion. SoftBank Vision is part of Tokyo-based conglomerate SoftBank Group Corp. The company also has invested in Nvidia and Uber.

GM reiterates its previously announced plans to invest $1.1 billion into self-driving vehicle systems. The carmaker says it has invested more than $500 million in the technology already this year.

GM acquired San Francisco-based Cruise Automation two years ago. The tech firm, which was launched in 2013, is testing the Chevrolet Bolt-based Cruise AV autonomous vehicle California, Arizona and Michigan.