GM and Lyft have announced a $500 million investment and autonomous vehicle alliance

Lyft and GM partnership and alliance

General Motors and Lyft have announced an alliance that will develop a network of on-demand autonomous vehicles.

Along with the alliance, GM has invested $500 million into the company as part of a $1 billion fund-raising round for the ride-sharing service.

The partnership is one of GM’s largest investments in a third-party company, and stems from their shared view that autonomous vehicles will first reach customers as part of ride-sharing services.

“We had a really common view of the future” with Lyft, said GM President Dan Ammann in an interview with Reuters.

Other investors included in the funding round include Kingdom Holding Company, the firm of prominent Saudi investor Prince Alwaleed bin Talal which invested $100 million, Janus Capital Management, Japanese online retailer Rakuten Inc, ride-hailing service Didi Kuaidi, and Chinese Internet giant Alibaba Group Holding Ltd.

“Lyft has built a strong business with fast growth and we believe in their long-term success,” Alwaleed said in a release.

GM and Lyft said the partnership would tap into GM’s work on developing autonomous vehicles and Lyft’s software that automates matching drivers and passengers, routing and payments to create a network of cars that would ferry themselves around major metropolitan areas.

There is no timeline for the new autonomous network, however, GM will immediately offer Lyft drivers short-term rentals of GM cars.

This latest funding round values Lyft at $5.5 billion as it engages in a fundraising race with its biggest competitor, Uber, which is attempting to raise $2.1 billion for a market valuation as high as $64.6 billion.