The autonomous driving theme continues to gain steam.

More proof of that statement comes from the multi-billion investment that GM Cruise received from both SoftBank (SFTBY) and General Motors Co.  (GM) .

Cruise was acquired by GM back in 2016 and is headquartered in San Francisco. The company focuses on autonomous driving and self-driving applications. Specifically, the automaker is banking on Cruise to push its autonomous driving efforts forward and help it launch its robo-taxi service.

That strategy is something the company is hoping to launch by 2019, following in the footsteps of Alphabet's (GOOG) (GOOGL) Waymo unit, which has been quietly running a robo-taxi service in Phoenix for a year, now giving about 400 rides per day.

Notably, though, GM appears ahead of its cross-town rival Ford Motor Co (F) in the robo-taxi race. It won't be long before several players are battling in this area, assuming we count Uber as a soon-to-be provider as well.

In any regard, SoftBank dumped $2.25 billion into the company for a stake just under 20%. That's pretty substantial, given that GM acquired Cruise for $581 million in cash and closer to $1 billion when including other incentives. Either way, that recent raise puts GM Cruise closer to an $11.5 billion valuation.

It's no wonder shares of GM caught such a boost on the SoftBank announcement, given that it now owns a huge majority of an $11.5 billion entity while it itself only sports a market cap of $61.5 billion. Worth noting is that that's lower than Tesla Inc.  (TSLA) and its $63.5 billion market cap.

In any regard, it's got General Motors thinking about its options with Cruise.

What to Do With GM Cruise

The automaker is in early internal discussions as to what to do with Cruise. Should it spin off the asset, launch a separate tracking stock or perform an IPO?

There are a lot of options and while the move would likely be several years into the future, it shows just how much potential this space has. After all, look no further than the valuation boost Cruise has received over the past few years.

It's likely that in a public offering -- assuming that GM were to hold onto a bulk of its position -- it would attract investors. There are not many pure-play autonomous driving investments after all.

Mobileye was one, but it was gobbled up by Intel Corporation (INTC) . NXP Semiconductors (NXPI) was a solid auto-tech play, but it's in the process of being acquired by Qualcomm Corporation (QCOM) . Plenty of others -- ranging from Nvidia Corporation (NVDA) to Ambarella (AMBA) to BlackBerry Ltd (BB) -- have self-driving car segments. But they don't provide a pure investment into the industry.

And why is a spinoff even being talked about? The argument for it is to unlock value and make it easier for Cruise to hire top talent and make acquisitions. It's easier to attract talent with the lure of stock options in a pre-IPO company. On the acquisition front, well, GM doesn't need much help there. It can flex its muscles when need be.

As for unlocking value, GM stock has gained about $7 billion worth of market cap since the deal was announced. It should also be noted that the stock is off its post-announcement highs, too, so for once it appears, Wall Street gave GM its due even if it was only temporary.

But not many would disagree that Cruise would garner a higher price-to-earnings valuation in the open market than GM currently does, given that the automaker has one of the lowest valuations in the S&P 500. If only a small part of Cruise were floated to the public, it would set a definitive value on GM's stake, which could help the stock move higher.

Should the market begin to value the company's stock more appropriately, perhaps General Motors will do nothing at all with Cruise. The average price target on GM over the last three months comes in near $55, roughly 27% above current levels. Citigroup holds a Street-high target of $70 per share on GM.

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This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.

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