Pedestrians cross the street in front of a Lyft car June 12, 2014, in San Francisco. Justin Sullivan/Getty Images

General Motors announced Monday it will invest $500 million in Lyft as part of a new effort between the two companies to develop autonomous vehicles. It comes as part of a $1 billion fundraising effort by Lyft.

Both companies say the deal stems from the idea that ride-sharing services like Lyft will someday be dominated by autonomous vehicles rather than cars owned by drivers. The deal represents GM's largest investment in an outside company.

“We see the future of personal mobility as connected, seamless and autonomous,” GM President Dan Ammann said in a statement Monday. “With GM and Lyft working together, we believe we can successfully implement this vision more rapidly.”

Uber, Tesla and Apple are also reportedly developing self-driving vehicles.

The other $500 million was pledged from Janus Capital Management, Saudi Prince Alwaleed Bin Talal's Kingdom Holding Co., along with previous investors Alibaba, Didi and Rakuten. The fundraising was enough to propel Lyft to a $5.5 billion valuation, which still pales in comparison to Uber's $62.5 billion valuation.

“Working with GM, Lyft will continue to unlock new transportation experiences that bring positive change to our daily lives,” John Zimmer, president and co-founder of Lyft, said in Monday's statement. “Together we will build a better future by redefining traditional car ownership.”