German carmakers have reportedly outbid Silicon Valley to buy Nokia’s mapping unit

BMWs will driving themselves soon enough.
BMWs will driving themselves soon enough.
Image: REUTERS/Kim Kyung-Hoon
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A consortium of German car makers—including the parent companies of Audi, Mercedes-Benz and BMW—are on the verge of buying Nokia’s digital mapping service, a technology that is crucial for self-driving cars.

The luxury car makers have begun to draw up a contract with Nokia, agreeing to pay over €2.5 billion ($2.7 billion), a person familiar with the situation told the Wall Street Journal, which reported that a deal could be announced in the next few days. That would trump rival bidders from Silicon Valley such as Google and Uber, which are developing their own self-driving cars that would rely heavily on mapping technology to navigate.

If the deal—which is still in early stages and is focused on patent issues—does pan out, the three auto makers plan to invite other automobile companies such as Fiat, Ford, Toyota, and General Motors, according to the Journal. Two sources close to the deal told Reuters that the deal hinges on the question of who owns the patents that connect self-driving cars to mobile networks.

The Nokia unit derives from Navteq, a mapping service that Nokia bought in 2008 for $8.1 billion, which can detect traffic and navigate in real-time using artificial intelligence. The unit generated over half of its sales in 2014 from the auto industry.