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Do-or-die self-driving race forces carmakers to choose allies

Toyota and SoftBank shift from partnership to capital tie-up

Clockwise from top left, the self-driving cars of Tencent, Baidu, Google's Waymo and General Motors' Cruise.   © AP

TOKYO -- Toyota Motor and SoftBank Group's mobility-services partnership announced Thursday marks a new phase in the race to make automated driving a reality, as automakers take the plunge on deeper information-technology tie-ups to avoid losing out to players like Google affiliate Waymo.

"Every time I opened a door to automated driving, there sat Son-san ahead of me," Toyota President Akio Toyoda said at a news conference on Thursday. The Japanese automaker has been looking to strengthen its hand in the sector by taking stakes in U.S. ride-hailing company Uber Technologies and other mobility startups.

But most targets it considered already counted SoftBank's $100 billion Vision Fund, led by group CEO Masayoshi Son, among their major shareholders. 

The partnership, called Monet Technologies, followed closely on the heels of Wednesday's announcement that Honda Motor would invest in General Motors' autonomous driving unit, GM Cruise Holdings -- another company in which the Vision Fund holds a stake -- as part of a partnership on self-driving taxis. The two tie-ups represent a step forward in automakers pushing beyond business partnerships with IT companies and into capital relationships.

Global automakers have sought to develop automated driving tech through partnerships with IT players. Nissan Motor has joined with online services company DeNA to test self-driving services, while Fiat Chrysler Automobiles is working to stockpile technology through a tie-up in which it provides vehicles to Waymo.

Still, automakers have been reluctant to deepen those bonds, wary of having their expertise and resources exploited if they choose their IT partners carelessly. Waymo and its peers already hold the lead in the artificial intelligence software that forms the brains of automated driving, while ride dispatchers and other services have pulled ahead in amassing driving and mapping data, which helps make self-driving programs more accurate.

Faster-than-expected advances in self-driving tech have made it tough for automakers to go it alone, while IT players would struggle to produce cars by themselves, given their lack of experience in mass production. Honda's and Toyota's new IT partnerships indicate the two sides are coming together to speed the process of making automated driving a reality.

"It feels as if the time has come at last," Son said.

Now the battle for automated-driving supremacy in both fields looks set to begin in earnest.

Asked during talks with Toyoda Thursday about how he envisioned the cars of the future, Son replied that they would be embodied by semiconductors, rather than screws and bolts.

Through the Vision Fund, SoftBank has taken a stake in U.S. chip design and graphics card maker Nvidia -- which commands a large share in chips for automated driving -- and purchased British semiconductor designer Arm Holdings. Those investments, coupled with its stakes in dispatching services, give the Japanese company a foothold in the technologies and services needed to make next-generation cars.

Toyota brings real-world strengths to the table, such as its global production network that churns out around 10 million vehicles annually. "Toyota's strength is in the power of the continuous improvement on its factory floors," Toyoda said.

Cars produce huge volumes of widely varied data. For instance, China's leading ride-hailing service, Didi Chuxing, has 10 billion annual riders' worth of information on who went from where to where and how much they paid. With the help of AI analysis, "Didi will be able to predict how many cars will be lacking in a 100-sq.-meter area 15 minutes from now, even before a passenger raises their hand," Son said.

The ability to amass more data than competitors and use it to create new services will greatly sway the battle in future.

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