SoftBank Vision Fund to invest £1.69bn in Alphabet competitor GM’s self-driving tech unit, putting the business’ valuation at £8.63bn

General Motors (GM) has announced today that SoftBank is to invest $2.25bn (£1.69bn) in its self-driving technology unit GM Cruise, with a further $1.1bn to follow from GM after the transaction closes.

This is set to result in the SoftBank Vision Fund owning 19.6 per cent equity stake in GM Cruise, with its investment to be made in two tranches. The first $900m will be provided at the closing of the transaction, alongside GM’s own investment, with a further $1.35bn to be completed when Cruise autonomous vehicles are ready for deployment into an app-based ride-hailing service similar to Alphabet’s Waymo and Uber.

Read more: Uber CEO says it is in talks to team up with rival Waymo on driverless cars

The funds are expected to provide the capital necessary to allow GM Cruise to reach commercialisation at scale by the beginning of 2019. SoftBank has also invested in other major ride-hailing services in recent years, including Uber and China’s Didi Chuxing.

In early trading, GM shares climbed as much as 11 per cent, and are on track for their biggest one-day gain ever. Before today, GM shares were sitting at an almost eight per cent year-to-date loss, but are now back in positive numbers.

“Our Cruise and GM teams together have made tremendous progress over the last two years,” said GM Chairman and CEO Mary Barra. “Teaming up with SoftBank adds an additional strong partner as we pursue our vision of zero crashes, zero emissions and zero congestion.”