Plus, any time something like this fails after a huge amount of hype for the tech, it press a fist right in the eye of similar techs that may have been more viable.
Advertising and perception affect a lot more people than just the ones handing over the dollars, especially when the amount of money flowing is so large and so based on publicity.
From GMs point of view, they got one the best freebies ever. Nikola assumed that by giving up so much in partnership with GM, they would bank and make more money on the press. I mean look at what GM is getting:
$700M in cash to build a production line that GM retains full ownership of.
$2B to design a vehicle platform that GM retains full ownership of.
Profit on the front end, as an exclusive major drivetrain component supplier
Profit on the back end, thanks to a cost-plus nature of the contract
Profit off all of Nikola's alleged other products (Class 7/8) trucks, as exclusive drive train supplier
Most of Nikola's ZEV credits
Its like the group project where someone offers to do all the work, just to brag that they hang out with the cool kids.