The two companies have a history of working together. Toyota and Microsoft have been collaborating for the past 10 months on a data project that uses Microsoft's cloud computing expertise. The project, called Toyota Connected, leverages Microsoft's Azure cloud-computing platform to provide data for areas ranging from nearby traffic patterns to safety to the driver's health.
But the partnership goes back quite a bit further. Toyota also said last summer that Microsoft would help build computer systems for the Toyota Gazoo Racing WRC team. Additionally, Toyota said back in 2011 that it would work with Microsoft to accelerate development of telecommunication and information technology for automobiles. The first cars to be on the receiving end of such research were Toyota's 2012 plug-in vehicles.
Microsoft is also working with other automakers. At the 2016 Consumer Electronics Show, the company said it had reached partnerships with Nissan and Volvo on technology related to car connectivity. At that point, Microsoft had already reached agreements with Ford as well as Delphi involving in-vehicle technology.
Microsoft didn't disclose financial terms of the most recent agreement with Toyota. Take a look at Microsoft's press release here.