SoftBank Vision Fund will invest $2.25 billion in General Motors Co.’s driverless-car unit, as the auto maker battles technology companies and startups in a race to commercialize autonomous vehicles.

GM said Thursday the technology-investment fund, an affiliate of Japan’s

SoftBank Group
Corp.

, will take a 19.6% stake in GM Cruise Holdings LLC, a newly formed entity primarily made up of Cruise Automation, the driverless-car developer that GM acquired in early 2016 for around $1 billion, including undisclosed milestone payments.

The Vision Fund’s investment values the business at $11.5 billion.

The Vision Fund’s investment will come in two tranches: an initial $900 million payment, and another of $1.35 billion once Cruise’s autonomous vehicles are ready for commercial deployment, GM said.

The deal will “afford GM increased flexibility with respect to capital allocation” as it plows more money into developing a network of autonomous ride-share vehicles, targeted for sometime next year, the company said.

For years, GM’s shares have languished as valuations for upstarts like electric-car maker

Tesla
Inc.

and ride-share firm Uber Technologies Inc. soared on expectations of heady growth.

Opening the Cruise subsidiary to SoftBank’s giant fund allows it to access capital that investors have been reluctant to grant the 110-year-old auto maker.

GM will retain an 80.4% stake in GM Cruise and invest $1.1 billion in the business.

During a press conference Thursday morning, GM Chief Executive

Mary Barra

called it a “landmark” investment that gives GM Cruise the capital it needs to get its driverless-car business to market.

Write to Mike Colias at Mike.Colias@wsj.com



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