Volkswagen and Microsoft have been cooperating since 2018 to connect cars with Azure, with first trials of the planned system due later this year and rollout envisaged for 2022.
German auto giant Volkswagen (VW) and US tech leader Microsoft say they were joining forces to develop autonomous vehicle driving systems, cementing a 2018 partnership to exploit the possibilities of their in development Cloud project.
Volkswagen said it aims to speed up development of such connected systems, which are increasingly becoming the norm in the auto industry as it transitions to electric vehicles.
"This is the next step in our strategic partnership," Microsoft director Scott Guthrie said.
The companies gave no information about the financial or contractual details of the accord.
'Richer and richer'
The various companies inside the group were still using different systems to develop that software, and the deal announced Thursday will put them on a common cloud provider, Dirk Hilgenberg, chief executive of Car.Software, told Reuters in an interview.
"Over-the-air updates are paramount," Hilgenberg said. "This functionality needs to be there. If you can't do it, you will lose ground."
In practical terms, the deal means that cars that initially hit the road with a few driver-assistance features today could add new capabilities over time that bring them closer to autonomous driving, said Scott Guthrie, executive vice president of cloud and artificial intelligence at Microsoft.
"For our phones 15 or 20 years ago, when you bought it, it pretty much never changed. Now, we expected every week or every couple of days that, silently, there's new features," Guthrie told Reuters in an interview.
"That ability to start to program the vehicle in richer and richer ways, and in a safe way, transforms how the experience works."
Volkswagen and Microsoft have cooperated since 2018 on creating a Cloud platform for connected vehicles.
The first trials of the planned system are due later this year, with rollout envisaged in 2022, a statement said.
Volkswagen plans to invest some 27 billion euros in this field by 2025.
Volkswagen's "Car.Software" unit set up last year will have some 11,000 people working on its "VW.OS" operating system which will connect cars over the Cloud.
The German group, like its peers, is finding that the shift into electric cars is as much if not more of a computing challenge than one of manufacturing, leading to an increasing number of such tie-ups.
General Motors has just signed a similar deal with Microsoft to speed up its introduction of autonomous vehicles while France's Renault established a partnership with Google last year.