How Nvidia’s ‘brains’ dominate the self-driving race
Santa Clara, Calif. — As Google, Uber and Tesla fight for control of the self-driving car market, another company better known for its gaming chips than its wheels is positioned to cash-in on the transportation revolution.
Nvidia has quietly become one of the top suppliers of the “brains” that control self-driving cars — the super computers that sit nestled inside the trunk or perhaps tucked behind the glove compartment and interpret visual cues like red lights and pedestrians, telling the vehicle how to respond. The Santa Clara-based chipmaker has racked up deals with big carmakers including Tesla, Audi, Mercedes, Toyota and Volvo and is poised to power a large portion of the burgeoning self-driving car industry, a market that is expected to hit $77 billion by 2035.
“Nvidia is obviously going to be one of the strongest players in this area,” said Gartner research director Mike Ramsey.
And by taking on self-driving cars, Nvidia is pulling off a key move from the Silicon Valley playbook. Expanding into new industries — think Google trying its hand at everything from drones to high-speed internet — is vital for any large company hoping to stay relevant in a world where innovative technology can quickly become obsolete, Ramsey said. Diversifying can be tricky, as proven by Yahoo’s unsuccessful attempt to expand into media. But if it works, it can act as insurance against future upsets.
“You never know when someone is going to come along in your core industry and kick your butt,” Ramsey said. “You’re not guaranteed to be at the top.”
While fully autonomous cars are still several years away, Nvidia’s newfound dominance in self-driving cars and early expertise in artificial intelligence is paying off. Its stock price tripled over the past 12 months, and it was the best performing company in the Standard & Poor’s 500 index last year — largely because investors see a coming windfall in AI and self-driving tech, experts say. Those up-and-coming sectors already helped boost Nvidia’s revenue last quarter nearly 50 percent from the year before.
“We’re at the very beginning of the AI revolution,” Danny Shapiro, Nvidia’s senior director of automotive work, said during a recent interview. “We’re fueling that revolution, and we’re extremely optimistic about where it’s going to take us.”
Founded in 1993, Nvidia became known for building powerful graphics processors (GPUs) used for rendering stunning video game visuals. About five years ago, Nvidia realized its GPUs also could be used for artificial intelligence — a major turning point for the company just as AI was becoming the hottest commodity in Silicon Valley. Big names including Google, Facebook, Shazam and Netflix started using Nvidia’s chips, running applications such as the facial recognition software that identifies people in Facebook photos.
Nvidia soon expanded into self-driving cars. In 2015, the company revealed the Nvidia Drive PX — the world’s first in-car super computer. Last year Nvidia unveiled the Drive PX 2, which is about the size of a license plate and boasts the power of 150 MacBook Pros.
“That has now snowballed into them being basically the leader for autonomous driving hardware for the auto industry,” said Egil Juliussen, director of research and principal analyst for automotive technology at IHS Markit.
But Nvidia isn’t alone in the race to dominate the market. Intel, so far Nvidia’s biggest competitor in self-driving cars, plans to have autonomous BMWs powered by Intel processors in production by 2021. Intel bought Mobileye, a leader in computer vision and mapping technology for self-driving cars, for $15.3 billion in March, giving the chipmaker a major step up in the autonomous vehicle game. Nvidia also may have to contend with competition from other chip companies like Qualcomm, or even Google and Apple, which reportedly also are making their own chips that could end up in self-driving cars.