Tesla abandoned Nvidia? Developing a chip with Nvidia's rival AMD

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The California-based electric auto giant has reportedly more than 50 employees involved in the project. The Tesla/AMD move has disruptive implications to the multi-billion self-driving market as Intel has spent enormous amounts to get into the space with limited success in our opinion. Also, AMD is the only player in the world that can offer both x86 CPU and strong GPU IP and expertise ... He said that it will likely result in AMD taking business from Nvidia around the edges, but that Nvidia will likely remain the market leader. AMD's stock has lost 1.7% over the past three months through Wednesday, while Nvidia shares have soared 16.5%, the PHLX Semiconductor Index has climbed 5.6% and the S&P 500 has gained 3.0%. That performance ranks No. 2 in the entire S&P 500, according to FactSet.

CNBC reported on Wednesday that Tesla is inching closer to completing this #AI Chip.

While Tesla now partners with Nvidia for computing needs within their cars, this deal involves Elon Musk's company relying heavily on tech that's designed by external sources, and it's natural and logical for Tesla to prefer a little less reliance on factors that are beyond their control when building their self-driving machines.

In similar fashion, another analyst said the Tesla news is a validation of AMD's technology.


Tesla might soon have a new AI chip built specifically for its cars to bring the Autopilot system to full-on self-driving status, and it's probably getting help.

The analyst also said if Tesla is focusing on AMD technology for its future autonomous driving efforts, investors may wonder about Nvidia's expected dominant position in the new market over the short-term.

Tesla shares fell 0.5% on the day to $372.62. Tesla represents less than 1% of the current auto market, and Nvidia already has partnerships in place with a bunch of other vehicle manufacturers.

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