Microsoft Writes Down $800 Million on GM-Backed Cruise Investment Amid Program Setbacks

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Microsoft's decision to write down $800 million on its investment in GM-backed Cruise is primarily due to the challenges and setbacks faced by the Cruise robotaxi program. General Motors (GM) has decided to exit the loss-making Cruise robotaxi business, which has led to the scrapping of the program. This decision by GM has significant financial implications for Microsoft, which had invested in Cruise as part of a broader strategy to advance autonomous vehicle technology and leverage Microsoft's Azure cloud platform for digital transformation in the automotive industry.

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The write-down reflects the impaired value of Microsoft's minority stake in Cruise, as the program has not achieved the expected commercial success and has faced regulatory and operational hurdles. Additionally, GM is buying back equity in Cruise from investors, including Microsoft, and increasing its stake from 90% to more than 90%. This restructuring indicates a strategic shift by GM away from the robotaxi business, further impacting Microsoft's investment value.

Despite these setbacks, Microsoft remains committed to its broader strategic partnership with GM, focusing on leveraging Azure for cloud computing, artificial intelligence, and machine learning to enhance GM's digital initiatives and support its transition to an all-electric future. This partnership aims to accelerate the commercialization of GM's all-electric and self-driving vehicles, although it acknowledges the challenges faced by the Cruise program.