Tesla Inc (NASDAQ:TSLA) CEO, Elon Musk recently revealed new plans for the company in the hardware it has been using for its Autopilot self-driving project, a move that has hurt the shares of its partner Nvidia Corporation (NASDAQ:NVDA). Musk suggested that Nvidia’s hardware is not strong enough to meet the regulatory requirements of proving that the autonomy is better than the human capabilities.
The company has been using Nvidia’s supercomputers and other hardware in all its self-driving cars in the process to automate all the features but have its own software designs. Nvidia’s stock dropped instantly as much as 0.7% in the late trading the moment Musk announced the changes in the conference call on November 1.
According to the latest news from NASDAQ, Tesla is planning to partner with AMD and CNBC to modify its silicon for its self-driving software. Another source from CNBC revealed that Tesla has received the samples for the first implementation of its processor and they’re already running the tests on the hardware. The shares of AMD rose 6% high after the news of the implied partnership leaked out.
Tesla partnered with Nvidia a year ago after a fall out with Mobileye NV, which was later sold out to Intel Corp. For some time, Mobileye had supplied the hardware to Tesla’s first-generation Autopilot technology but the two firms separated ways after Tesla’s client crashed in one of the self-driving cars. Mobileye stated that Tesla was moving too fast with its self-driving initiative while Tesla reiterated by saying that Mobileye was trying to keep them from developing their own hardware designs.
Though Tesla is Nvidia’s main customer, Nvidia also has partnerships with other leading car companies including Toyota, BMW, Audi, and Mercedes-Benz. According to CNBC, Tesla should consider developing chips in-house to make it less dependent on Nvidia and other companies in the future. Earlier reports indicate that Tesla was planning to design its own hardware with the help of Autopilot executive Jim Keller, an experienced chip designer who had previously worked for Apple and Advanced Micro Device.