Japanese carmaker Honda is to invest $2.75bn (€2.39bn) and take a stake in General Motors' self-driving unit, GM Cruise.
Honda said it wanted to develop a self-driving car that could be mass-produced.
San Francisco-based GM Cruise, which developed Chevy's first driverless cars, states that the technology it is working on allows self-driving cars to see more than a human driver would, since each car would have 10 cameras installed, taking photos at a frequency of 10 shots per second.
"We see more of what is going on around the car at any given time than a driver can," GM Cruise said.
The race to develop autonomous vehicles is becoming more and more competitive, with Toyota and Softbank creating a new venture to develop transport services using autonomous vehicles.
However, a series of accidents have left some consumers wary of driverless cars.
Ridesharing company Uber briefly suspended self-driving cars tests in March after a fatal accident in the US, while a self-driving car owned by Apple was involved in an accident early in September.