Nvidia Muscles In on Tesla, Alphabet’s Self-Driving Car Turf

Wayve develops “vehicle agnostic…advanced AI software and foundation models” for self-driving cars. (Courtesy Wayve)

Key Points

About This Summary

• Wayve, a self-driving tech firm, will receive $500 million from Nvidia in its next funding round.
• Wayve aims to partner with auto makers, providing AI for self-driving tech, backed by Nvidia, SoftBank, and Uber.
• Nvidia invests in Wayve to ensure autonomous driving works, driving demand for its chips in the future.

Artificial intelligence is training cars to drive themselves, potentially adding trillions in market value to the likes of Tesla and Waymo parent Alphabet .

The company that makes the chips for AI wants a piece of the action, too.

Thursday, self-driving technology provider Wayve announced a coming $500 million investment by Nvidia in the start-up’s next funding round.

Wayve develops “vehicle agnostic…advanced AI software and foundation models” for self-driving cars. Its goal is to partner with auto makers, providing the AI brain for enabling self-driving technology, serving as the virtual driver for anyone’s car. It’s backed by Nvidia, SoftBank, Uber, and others.

Wayve’s technology and business model provide another example of how AI is on the cusp of disrupting the traditional personal transportation market. What’s more, AI-based self-driving isn’t the domain of start-ups in need of cash. Technology giants, including Tesla, Alphabet, and Amazon.com, via their Zoox subsidiary, use AI technology to, essentially, teach cars to drive themselves. And much of the foundational technology for AI computing comes from Nvidia.

Nvidia might not want to develop self-driving cars on its own. But it is investing to ensure autonomous driving technology works. Self-driving cars are an AI application that can drive demand for its chips far into the future.

“Continued support from a global technology leader like Nvidia underscores confidence in our AV2.0 approach to building embodied AI and its potential to transform the future of mobility,” said Alex Kendall, Co-founder and CEO of Wayve, in a news release.

AV2.0 integrates sensors, computing, and driving into one end-to-end self-driving solution, according to the company.

Autonomous driving has made incredible strides lately. In June, Tesla launched its self-driving taxi service in Austin, Texas. In July, CEO Elon Musk said he hoped Tesla robo-taxis would be serving half the U.S. population by year’s end. In September, Amazon’s Zoox started offering free autonomous taxi rides in Las Vegas.

Waymo’s autonomous taxis already operate in San Francisco, Phoenix, Los Angeles, Austin, and Atlanta through Uber . It completes more than 250,000 autonomous taxi rides each week. The Alphabet subsidiary plans to add Miami next year and is testing in New York and Las Vegas.

Musk believes self-driving cars will generate many trillions in value for Tesla. It’s an aspirational target, but Wall Street estimates for self-driving value range from hundreds of billions to trillions of dollars.

Analysts are optimistic about the potential for self-driving tech. It’s hard to say which technology providers will win the lion’s share of robo-taxi business, but the wait for safe, scalable autonomous cars is over.

Wayve is privately held. Nvidia stock gained 0.2% on Friday, closing at $176.60, while the S&P 500 and Dow Jones Industrial Average added 0.5% and 0.4%, respectively.

Write to Al Root at allen.root@dowjones.com