Cruise shutdown blastzone increases – Microsoft takes $800M charge
- Reference: 1734024972
- News link: https://www.theregister.co.uk/2024/12/12/microsoft_to_take_an_800m/
- Source link:
In a [1]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.
Cruise robotaxis parked forever, as GM decides it can't compete and wants to cut costs [2]READ MORE
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 [3]snapped a picture of a parking lot full of resting Cruise cabs.
[4]No pilot? No problem! EHang's autonomous air taxis take off in Thailand
[5]Nolanverse Batmobile leaps barrier between film and reality – but it'll cost you
[6]Tesla delays 'Robotaxi' event as Musk 'makes' design 'tweaks'
[7]Chinese car brands hit accelerator on road tests for level three autonomous driving tech
The autonomous taxis became available for public hire in February 2022, but a [8]succession of incidents meant the robocabs were required to have a human at the wheel, thus defeating the point of the system.
Microsoft [9]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.
[10]
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."
[11]
However, rather than making autonomous transportation mainstream, at least via the medium of autonomous taxis, Microsoft is instead taking an $800 million charge.
[12]According to Nikkei Asia, Honda will also dissolve its self-driving vehicle partnership with GM. ®
Get our [13]Tech Resources
[1] https://www.sec.gov/ix?doc=/Archives/edgar/data/789019/000119312524275524/d865252d8k.htm
[2] https://www.theregister.com/2024/12/11/cruise_gm_shutdown/
[3] https://www.theregister.com/2024/12/11/cruise_gm_shutdown/
[4] https://www.theregister.com/2024/11/12/thailand_pilotless_air_taxi/
[5] https://www.theregister.com/2024/11/07/the_batmobile_is_real_and_expensive/
[6] https://www.theregister.com/2024/07/16/tesla_robotaxi_event_has_been/
[7] https://www.theregister.com/2024/06/04/china_autonomous_driving_tests/
[8] https://www.theregister.com/2023/10/24/california_dmv_cruise/
[9] https://news.microsoft.com/2021/01/19/cruise-and-gm-team-up-with-microsoft-to-commercialize-self-driving-vehicles/
[10] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z1trE3KFsntpXb-3spzYRwAAAMU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[11] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_software/aiml&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z1trE3KFsntpXb-3spzYRwAAAMU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[12] https://asia.nikkei.com/Business/Automobiles/Honda-to-end-self-driving-tie-up-with-GM-as-Cruise-unit-founders
[13] https://whitepapers.theregister.com/
Oh dear
what a shame. Boo hoo
What until AI implodes, you'll be able to add an extra 0 to that number.
Big city not working
San Fran has been diminishing over time. The cost to do business in the city is very high and the liberal policies have adding to incidents of crime and people living (and relieving themselves) on the street. Every couple of years I'd go to SF for a conference or trade show, but it's on my "do not visit" list. Initially, it was down to cost but piling on the other things makes it not worth it. The reason I bring this up as it should be the perfect place for autonomous taxis, lots of visitors, high density, expensive to operate a private vehicle and terrain in places that makes it difficult to walk. There should be enough room for a couple of operators if the tech was ready for prime time. To have one of two completely pull out means there isn't a financial basis. I expect there are still plenty of gypsy cabs (Uber, Lyft, etc) since plenty of people don't trust the automation and to make it work there has to be some geo-fencing even if it's just for technical reasons.
Who will pay?
The poor suckers who use their products. It is probable that the revenue has been incorporated in their Quarterly reports to the SEC/Wall St. Not having it will be a big hole that will need filling ASAP.
Now with the 25% Tariffs soon to be imposed by Trump V2.0, they are the perfect cover for increasing prices across the board.
Musk must be very pleased. All he needs to do is sink Waymo and the market is his and his alone.