General Motors Co.’s proposed purchase of tiny Cruise Automation Inc. for more than $1 billion would be one of the auto industry’s biggest Silicon Valley acquisitions to date. And it would certainly not be the last.

Auto makers and car-parts suppliers have hooked into tech startups in recent years to boost their in-vehicle connectivity and to accelerate autonomous-car development. The Bay Area already is dotted with auto-industry outposts funding or recruiting Silicon Valley engineering talent to keep pace with Alphabet...