General Motors has announced that it will stop funding the development of the Cruise autonomous taxi.
The company says it will now “refocus the development of autonomous driving on personal vehicles.”
GM also cited the increasingly competitive robo-taxi market as the reason for the move.
In October, Tesla boss Elon Musk unveiled the electric car giant's highly anticipated robotaxi, the Cybercab, at Warner Bros Studios in Burbank, California.
GM attributed the change in strategy to the “considerable time and resources that would be required to scale the company.”
The company did not say how many Cruise employees might transfer to GM.
GM, which owns about 90% of Cruise, said it had reached agreements with other shareholders that would increase its stake to more than 97%.
In December 2023, Cruise announced it would cut 900 jobs, or around a quarter of its workforce.
The announcement comes as safety officials are investigating the company following reports of pedestrian injuries.
Cruise previously withdrew all of its U.S. vehicles from testing after California suspended its driverless testing permit.
The Detroit-based manufacturer's chief executive, Mary Barra, previously predicted that the cruise business could generate $50 billion (£39 billion) in annual revenue by 2030.
Competing automakers have also struggled with plans to build autonomous vehicles.
In 2022, Ford and Volkswagen announced the closure of Argo AI, their autonomous car joint venture.
Meanwhile, the emerging robo-taxi industry is also attracting major players.
Besides Tesla, competitors to create self-driving taxis include Waymo, a subsidiary of Google parent company Alphabet, and tech giant Amazon.
Ride-sharing companies Uber and Lyft also have ambitions to use autonomous vehicles.
