Daimler confirmed on Wednesday that talks were on between Amazon and Microsoft with Germany’s luxury carmakers for taking a minority stake in HERE to help develop self-driving cars. HERE is a digital mapping business that is controlled by a Germany carmakers’ conglomerate.

With the aim of creating an alternative digital mapping business to Google, HERE was bought from Nokia last year for 2.5 billion euros ($2.8 billion) by Germany’s luxury carmakers including Daimler’s Mercedes, Volkswagen’s Audi division and BMW.

“We are talking to Amazon, Microsoft and many auto makers,” said Thomas Weber, a Daimler board member in charge of research and development according to a  report published in the The Wall Street Journal.

A Daimler spokesman on Wednesday confirmed the remarks.

Earlier this month, there were reports published by news agency Reuters about Amazon and Microsoft being in talks with the carmakers.

The mass of data collected from sensors on board thousands of Mercedes, BMW and Audi cars requires cloud computing and the German carmakers’ consortium is on the lookout for a provider of such cloud computing services.  The analyzed data related to traffic and road conditions is then fed into digital maps.

“We need a cloud provider to handle the huge amounts of data created by HERE and its users. We haven’t taken any decisions yet,” Weber was quoted by The Wall Street Journal as saying.

Self-driving cars, which are equipped with street-scanning sensors to measure traffic and road conditions are supplied with information for road controlling by intelligent mapping systems. This location data can in turn be shared with other map users.

Tech firms and other auto makers were approached about joining the venture as strategic investors by Germany’s premium car makers Audi AG, BMW AG and Daimler AG which had bought HERE.

“We need a cloud provider to handle the huge amounts of data created by HERE and its users. We haven’t taken any decisions yet,” Thomas Weber was quoted in The Wall Street Journal as saying.

If the talks go through and Microsoft and Amazon manage to acquire a stake in HERE, experts say, it would be a major step in creating a global platform for connected cars that links the engineering prowess of some of the industry’s top auto makers and information technology know-how of Silicon Valley.

The fact that Amazon and Microsoft are  the natural and most fierce competitors of Google makes them natural allies for HERE. Fearing that they could lose control of data produced by the car and its users and sacrifice potential profits, the German auto makers have been wary of allowing Google to get too deep inside their vehicles.

“We’ve always said that we wanted to protect our independence,” Mr. Weber said to The Wall Street Journal.

However there was confirmation that the talks with Amazon and Microsoft were still in the very early stages and a possible deal would not be possible until later this year.

(Adapted from reuters.com & wsj.com)

Categories: Strategy