Cruise Shutdown Blastzone Increases – Microsoft Takes $800M Charge

Microsoft is among those in the blast radius of General Motors' decision to wind up its autonomous taxi business, Cruise.

In a filing made to the US Securities and Exchange Commission (SEC) this week, the company said it expected to record an impairment charge to the tune of approximately $800 million in the second quarter of fiscal year 2025. It will categorize the charge as "Other income and expense" and estimated that the impact would be approximately $0.09 to second quarter diluted earnings per share.

Microsoft noted that the charge wasn't included in the second-quarter guidance provided on October 30. However, even then, it was clear that things were not going well for Cruise. General Motors' announcement that it was pulling the plug refocusing Cruise's operation earlier this week did not come as a surprise considering the technical challenges encountered by the self-driving outfit.

A few weeks before GM gave up on the robotaxis, a Vulture from El Reg's San Francisco office snapped a picture of a parking lot full of resting Cruise cabs.

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The autonomous taxis became available for public hire in February 2022, but a succession of incidents meant the robocabs were required to have a human at the wheel, thus defeating the point of the system.

Microsoft announced its minority investment in January 2021, joining Honda and other institutional investors. All told, the players invested $2 billion at the time, bringing the post-money valuation of Cruise to $30 billion.

What a difference a few years makes.

Microsoft was also meant to be Cruise's preferred cloud provider. Company boss Satya Nadella said, "As Cruise and GM's preferred cloud, we will apply the power of Azure to help them scale and make autonomous transportation mainstream."

However, rather than making autonomous transportation mainstream, at least via the medium of autonomous taxis, Microsoft is instead taking an $800 million charge.

According to Nikkei Asia, Honda will also dissolve its self-driving vehicle partnership with GM. ®