Uber has agreed to invest as much as $1.25 billion in Rivian and purchase up to 50,000 autonomous vehicles as part of its strategy to transition from human drivers to robotaxi fleets. The ride-hailing app will make an initial $300 million investment, increasing to $1.25 billion by 2031 if Rivian meets technology milestones. The deal includes 10,000 robotaxi versions of Rivian's new R2 SUV.

Uber lacks its own in-house self-driving technology after CEO Dara Khosrowshahi sold the company's AV research division in 2020. This move follows recent partnerships with Amazon's Zoox, a $300 million stake in Lucid, and collaborations with Alphabet's Waymo and Baidu. Uber faces competition from these companies offering their own autonomous services.

The deal provides a much-needed boost for Rivian, which has suffered an 88 percent plunge in its share price since its 2021 IPO and expects to lose as much as $2.1 billion this year. The partnership will help Rivian accelerate its path to level 4 autonomy with the R2 SUV featuring advanced sensor technology.