Nvidia’s autonomous tech gives other automakers a chance to take on Tesla

Tesla is known for being an island. While most other carmakers and robotaxi services rely on an intricate web of hardware and software partnerships, Tesla does nearly everything in-house, from vehicle construction to the AI that powers its Full Self-Driving technology.

Enter Nvidia, whose autonomous driving software and hardware announcements yesterday underscore how Tesla’s once inaccessible approach to autonomy is becoming something other automakers can buy.

Presenting at the CES conference in Las Vegas yesterday, Nvidia CEO Jensen Huang unveiled Alpamayo, an open “reasoning” AI model family designed specifically for autonomous driving. The Alpamayo family of tools will introduce “chain-of-thought” models that can assess “novel or rare scenarios step by step.” In the press release accompanying the announcement, Huang said that the “ChatGPT moment for physical AI is here” and that he expects robotaxis to be among the first to benefit. Nvidia confirmed that Mercedes-Benz will begin shipping cars with the technology this year, offering advanced driver-assistance features comparable to Tesla’s FSD. (Mercedes’ former parent, Daimler, once held a 10% equity stake in Tesla.)

The AI chip designer also announced that it’s expanding its DRIVE Hyperion autonomous vehicle platform, bringing in a wide range of auto suppliers and sensor makers as it pushes the system as a ready-to-use foundation for self-driving cars and robotaxis. The platform bundles Nvidia’s latest Thor chips with cameras, radar, and lidar, centralized vehicle controls, and safety, simulation, and AI training tools — effectively packaging many of the pieces Tesla has built in-house into a system other automakers can use.

Taken together, the announcements show Nvidia turning autonomy into a platform business — one that could erode Tesla’s long-standing advantage by allowing rivals to buy the hardware, software, and safety infrastructure Tesla built for itself.

“I’m not losing any sleep about this,” Tesla CEO Elon Musk, who has had a notably chummy relationship with Huang, posted last night — one of several about the Nvidia announcements. “And I genuinely hope they succeed.”

In another comment, Musk noted that there’s a years-long interval between when autonomous tech “sort of works to where it is much safer than a human,” suggesting that Tesla is way ahead of any would-be competitors. Indeed, Musk added, “This is maybe a competitive pressure on Tesla in 5 or 6 years, but probably longer.”

Tesla is down about more than 4% today, while Nvidia, up slightly earlier today, is flat. Aeva, a 4D lidar company Nvidia announced a partnership with, soared as high as 37%.