GM bets $3.5bn more on self-driving tech unit as SoftBank exits

A Cruise self-driving car, which is owned by General Motors Corp, is seen outside the company’s headquarters in San Francisco. (Reuters/File)
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Updated 20 March 2022
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GM bets $3.5bn more on self-driving tech unit as SoftBank exits

WASHINGTON: SoftBank Group Corp’s Vision Fund exited its bet on General Motors (GM) self-driving car subsidiary Cruise as the auto giant upped the ante, investing another $3.45 billion in the loss-making unit.
SoftBank’s departure, which comes as the Japanese conglomerate struggles with debts, prompted questions from sector watchers about whether Cruise is ready to generate meaningful revenue for the time being, and how deep GM might have to dig to fund development.
GM said on Friday that it has agreed to pay $2.1 billion to buy the SoftBank Vision Fund stake in Cruise, and to make a separate $1.35 billion investment in the unit that SoftBank had committed to make in 2018.
Combined, the transactions will bring GM’s stake in Cruise to 80 percent, GM said. Other remaining shareholders in Cruise include Microsoft, Walmart and Honda Motor Co.
In 2018, SoftBank invested $900 million in Cruise and said it would invest another $1.35 billion when Cruise’s autonomous vehicles were ready for commercial deployment, potentially bringing its stake to 20 percent.
As recently as last month, Cruise said SoftBank would invest the $1.35 billion in the company as outlined in 2018.
A person briefed on the matter said SoftBank, including follow-on fundraising rounds after 2018, invested about $1.2 billion in Cruise in total. The person declined to be identified because the information was not public.
The SoftBank exit comes as Cruise awaits a regulatory permit to allow it to charge riders for a driverless ride-hailing service launched in San Francisco.
“Based on the experience that we have seen from Alphabet’s Waymo in Arizona, the revenue that you will generate from that deployment will be very, very small,” said Raj Rajkumar, professor of electrical and computer engineering at Carnegie Mellon University, referring to a project developed by the parent of Google.
“It is a long road ahead,” he said, adding that GM and partners like Honda may have to “dig deep into their pockets” to fund the unit for the time being.
SoftBank has its own internal problems to deal with.
The value of marquee companies in the tech investor’s portfolio have tumbled, hit by China’s crackdown on tech companies, the prospect of higher interest rates and war in Ukraine.
“We will definitely be selling a good chunk of assets,” SoftBank CEO Masayoshi Son said last month, as he pivots from the collapse of the sale of chip designer Arm to a plan to list it in the United States.
SoftBank declined to comment on the Cruise exit.
In a statement, GM CEO Marry Barra said, “GM is leveraging the strength of its balance sheet to capitalize on the opportunity to increase its equity investment in Cruise and advance our integrated autonomous vehicle strategy.”
Kyle Vogt, CEO and co-founder of Cruise, said in a series of tweets that Cruise would begin allowing employees to sell vested shares to GM once a quarter in an effort to give financial flexibility to employees.
Going public would be “a major distraction, especially right now,” he said, adding he wanted the company focused on scaling up the driverless ride-hail service launched in San Francisco.
In December, GM announced that Dan Ammann, then chief executive of Cruise, was abruptly leaving the company. One person briefed on the matter said he was dismissed, while another source said he and GM disagreed over when to take Cruise public.
Barra previously downplayed the need for a quick Cruise public offering.
GM spokesman David Caldwell said the latest deal showed GM’s belief in Cruise and simplified the ownership structure. He said that other shareholders in Cruise including Microsoft, Walmart and Honda, had technology partnerships, such as a delivery project with Walmart.


Saudi Arabia and Australia sign deal to boost trade ties

Updated 19 sec ago
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Saudi Arabia and Australia sign deal to boost trade ties

RIYADH: Trade ties between Saudi Arabia and Australia are set to strengthen after the two countries signed an agreement to improve cooperation across multiple sectors. 

According to a press statement, the memorandum of understanding was inked between the Australia Saudi Business Council & Forum and the Export Council of Australia. 

The agreement will focus on cooperation in industry, mining and food as well as agriculture, technology, and artificial intelligence. 

The deal will increase the opportunities for Australian exporters to collaborate with Saudi entities, enhancing bilateral cooperation. 

The agreement was signed by the President of the Australia Saudi Business Council & Forum, Sam Jamsheedi, and Arnold Jorge, CEO of the Export Council of Australia, during the latter’s visit to the Kingdom with a delegation. 

“Under this strategic partnership, we will seek to work together closely in identifying initiatives that facilitate connections between Australia and Saudi Arabia,” said Jamsheedi. 

According to the UN Comtrade database, Australia’s exports to Saudi Arabia stood at $789.65 million in 2023. 

On the other hand, the Kingdom’s exports to Australia amounted to $702.75 million over the same 12-month period.  

“We will combine our resources and networks to boost the success of collaborations and partnerships between relevant organizations and individuals of our two countries,” said Jorge. 

The Australia Saudi Business Council was formed in 2013 to facilitate the promotion of ongoing and bilateral trade between the two nations.

In November, Saudi-based Abdel Hadi Al-Qahtani and Sons Co. and Australia’s SSS Group signed a $27 million deal to collaborate in the production of scaffolding systems in Saudi Arabia using local resources.

After the deal was signed, Australian Ambassador Mark Donovan told Arab News at the time that the cooperation agreement builds on the existing investment ties between both countries in various sectors, including education, health care, aviation, and services.

“A new and transformed Saudi Arabia is looking for business relationships around the world, and that’s what we’re very pleased to be a part of,” said Donovan at that time. 

In March, Australia’s University of Wollongong procured licenses to open its branches in the Kingdom. 


Top Saudi officials hold discussions with global aviation giants

Updated 6 min 23 sec ago
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Top Saudi officials hold discussions with global aviation giants

RIYADH: Supply chain challenges, investment attraction, and modern technology were all discussed by Saudi Arabia’s industry minister and the heads of global aviation companies at the Future Aviation Forum 2024.

Bandar bin Ibrahim Alkhorayef held discussions with the president of the Commercial Aircraft Corp. of China, the president and CEO of Embraer Commercial, and the president of Boeing, at the Riyadh event, the Saudi Press Agency reported. 

Alkhorayef focused on bolstering cooperation across various segments of the aviation industry in the talks and the discussions highlighted the Kingdom’s opportunities, addressed global supply chain challenges, and explored avenues for investment attraction, technological advancement, and knowledge exchange. 

Meanwhile, the minister toured the pavilions of several global aviation companies, including Airbus, Boeing, and Riyadh Air, participating in the event organized by the General Authority of Civil Aviation at the King Abdulaziz International Conference Center. 

Furthermore, he received updates on the latest technologies and recent advancements in the aviation industry and its related sectors. 

On May 20, Saudia Group signed a $19 billion order deal for 105 planes, marking the largest aircraft deal with Airbus in the Kingdom’s history. 

The agreement was made public in the presence of Minister of Transport and Logistic Services Saleh bin Nasser Al-Jasser and Benoît de Saint-Exupery, executive vice president of sales at Airbus. Saint-Exupery stated that the new aircraft will play a “vital role” in contributing to Saudi Arabia’s ambitious Vision 2030 plan. 

The forum, held under the patronage of King Salman from May 20 to 22, showcases investment opportunities exceeding $100 billion. It aims to achieve the goals of Saudi Vision 2030, transforming the Kingdom into a leading logistics hub in the Middle East and meeting the objectives of the national aviation strategy. 

The event features participation from over 30 ministers, 77 leaders of civil aviation authorities, global airline executives, and 5,000 industry experts and leaders from more than 120 countries. 


Riyadh Air and Saudia agree new joint training programs

Updated 57 min 11 sec ago
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Riyadh Air and Saudia agree new joint training programs

RIYADH: Saudi Arabia’s two national airlines will work together to train pilots, aircraft crews and other aviation employees thanks to a new deal.

Riyadh Air, the airline announced by Crown Prince Mohammed bin Salman in March 2023, has reached an agreement with the Saudi Academy – affiliated with the Saudia group, the national carrier of the Kingdom.

The memorandum of cooperation, signed at the Future Aviation Forum in Riyadh, represents a turning point in specialized education in the field of aviation for Saudi Arabia’s national carriers, paving the way towards improving the training standards of pilots, aircraft crews and air operations, according to the Saudi Press Agency.

The agreement will enable the two national carriers to integrate their expertise and resources to provide training programs covering a wide range of specializations, SPA’s report added.

These programs will include technical training, aviation basics, and ground operations, as well as management principles, linguistic proficiency, and compliance with regulatory provisions and standards.


Pakistan GDP grows 2.09% in Q3, supported by agriculture

Updated 21 May 2024
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Pakistan GDP grows 2.09% in Q3, supported by agriculture

  • Pakistan’s central bank in latest report projected real GDP growth of 2-3% for the fiscal year 2024 
  • Provisional 2024 financial year growth in agriculture estimated at 6.25%, 1.21% for industry and services

ISLAMABAD: Pakistan’s economy grew 2.09% in the third quarter of the financial year 2023-2024, supported by higher growth in agriculture, the Pakistan Bureau of Statistics said in a press release on Tuesday.

The estimated provisional growth rate of gross domestic product (GDP) for the financial year ending June 2024 is 2.38%, the bureau said in a statement. That compares with a revised 0.21% economic contraction in the 2023 year when political unrest, a combination of tax and gas tariff hikes, controlled imports, and a steep fall in the rupee currency rapidly pushed up inflation.

Last week in its half yearly report, Pakistan’s central bank projected real GDP growth of 2-3% for the fiscal year 2024.

There was no comparable year-ago third quarter GDP data as Pakistan only began releasing quarterly growth numbers from November. That was done in compliance with the structural benchmarks of the current $3 billion bailout program agreed with the International Monetary Fund and completed last month.

The bureau revised the first and second quarter GDP estimates for financial year 2023-2024 to 2.71% and 1.79% respectively, compared to earlier estimates of 2.5% and 1%.

The provisional 2024 financial year growth in agriculture was estimated at 6.25%, and 1.21% for both industry as well as services, it added.

“The healthy growth of agriculture is mainly due to double-digit growth in important crops,” the bureau said, adding that bumper crop of wheat, cotton, and rice contributed to the positive result.


IMF expects UAE’s economy to grow by 4% in 2024

Updated 21 May 2024
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IMF expects UAE’s economy to grow by 4% in 2024

RIYADH: The UAE’s gross domestic product is set to expand by 4 percent this year, driven by robust domestic activities and relatively high oil prices, an International Monetary Fund has forecast.

In its latest Article IV end of mission statement, the IMF noted that the Emirates is experiencing strong growth in domestic sectors, including tourism, construction, and financial services. 

The report further noted that UAE’s oil GDP will also expand this year if the Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, decide to ease the previously proposed output cuts. 

“Economic growth in the UAE is broad-based, led by robust activity in the tourism, construction, manufacturing, and financial services sectors. Foreign demand for real estate, increased bilateral and multilateral ties, and the UAE’s safe haven status continue to drive rapid growth in housing prices and an increase in rents while adding to ample domestic liquidity,” said the IMF in the statement. 

In its previous projection in April, the organization predicted that the UAE’s economy would grow by 3.5 percent in 2024. 

The UN financial agency added that the impact of geopolitical tensions in the Emirates so far is still minimal, and the country’s response to the recent flooding was rapid and effective. 

IMF further pointed out that the inflation rate in the UAE is expected to be contained at 2 percent in 2024. 

According to the study, the UAE’s fiscal and external surpluses are expected to remain high this year due to relatively surging oil prices. 

“The general government surplus is projected to be around 5 percent of GDP in 2024 and public debt is on track to decline further toward 30 percent of GDP, benefitting from active debt management strategies,” said IMF. 

It added: “Capital spending is expected to meet ongoing infrastructure needs, and the introduction of the corporate income tax will support non-hydrocarbon revenue with its full implementation in the coming years. The current account surplus is projected at around 9 percent of GDP in 2024.” 

The international financial institution also noted that accelerated public and private investment and structural reforms in areas like renewable energy and technology could further accelerate economic growth in the Emirates. 

However, the IMF noted that the UAE’s economic outlook is subject to uncertainty and external risks, including those related to geopolitical tensions, global growth, and commodity price volatility. 

The study highlighted that banks in the Emirates have considerable capital and liquidity buffers, while credit growth is resilient despite higher domestic interest rates. 

“The efforts to digitalize the financial system and payment landscape are welcome and should continue to follow a risk-conscious approach. Initiatives to develop and regulate the virtual asset industry should be informed by a careful assessment of macroeconomic and financial stability risks,” said the IMF. 

The report concluded by saying that gradual fiscal consolidation and further structural reforms will ensure the UAE’s economic prudence and medium-term sustainability.