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Uber (NYSE:UBER) and Pony.ai (NASDAQ:PONY) unveiled a strategic partnership Tuesday to launch autonomous robotaxi services in the Middle East.
Shares of Pony.ai soar after the news, up 7% on early Tuesday trading.
The partnership will bring Pony.ai's self-driving cars onto Uber's platform, starting in the region before expanding to more global markets. It's a big move for both companies, especially Pony.ai, which is pushing hard to scale its driverless tech worldwide.
The plan is to combine Uber's massive ride-hailing reach with Pony.ai's Virtual Driver system, a vehicle-agnostic platform that works across a variety of car types and services.
Pony.ai, founded in 2016, already has a presence in China, East Asia, Europe, and parts of the Middle East. The company builds its own autonomous driving software and hardware in-house.
While the tech looks promising, Pony.ai still faces financial headwinds. It's burning through cash, with profitability still out of reach and valuation metrics under pressure.
This article first appeared on GuruFocus.