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NVIDIA Bonds With Mercedes for Next-Gen AI-Run Vehicles

Zacks Equity Research

NVIDIANVDA announced at Customer Electronics Show (CES) 2019 that it has extended its partnership with Mercedes-Benz, owned by Daimler AG DDAIF, to build artificial intelligence (AI) architecture for Mercedes-Benz cars.

Per NVIDIA, with this collaboration, a single system — providing self-driving capabilities and smart-cockpit functions — will be developed to replace dozens of smaller processors known as electronic control units (ECUs) inside the current cars.

The companies claim that combining NVIDIA’s Drive AGX platforms with Mercedes’ automotive engineering experience, a more capable and cost-effective next-generation vehicle architecture will be invented.

Moreover, the companies believe that centralizing and unifying compute in the car will help integrating and upgrading the advanced software features for self-driving vehicles and making AI-powered user experiences much more convenient.

The partners assert that the supercomputer will enable Mercedes vehicles to run AI capabilities in the car and in the cockpit, ranging from safe autonomous driving to advanced convenience features.

NVIDIA and Mercedes-Benz collaboration dates back to CES 2017 wherein both had announced a partnership to build self-driving cars powered by AI. At CES 2018, the companies brought the Mercedes-Benz User Experience (MBUX) to the fore, which signifies an AI-powered cockpit. Moreover, last July, the two collaborated with Bosch to operate a robo-taxi service in San Jose during the latter half of 2019.

NVIDIA’s collaboration with a luxury-brand like Mercedes-Benz, which has huge manufacturing capacity, makes us optimistic about its growth prospects.

NVIDIA’s Automotive Drive

The chip-maker is pulling out all the stops to become a leading provider of technology for autonomous vehicles. It is hogging the limelight with its initiatives in driverless vehicles and powering AI technology to build autonomous vehicles.

Earlier at the ongoing event, NVIDIA unveiled the world’s first commercially available Level 2+ automated driving system — Drive AutoPilot.  The platform by “integrating multiple breakthrough AI technologies” is likely to aid automakers to introduce more advanced driving features into their self-driving vehicles.

Notably, in the last few years, NVIDIA has been trying to fortify its capabilities in the space via several partnerships. The company is already leading the market, outdoing other rivals, such as Intel Corp. INTC and Advanced Micro Devices AMD in terms of growth.

We believe, this year too will be no exception for the company as reflected in the collaborations it announced during the CES event.

With its steadfast focus on developing more innovative technologies for self-driving cars, we perceive that the company is well poised to encash this megatrend. These initiatives are likely to reinforce investor confidence in the Zacks Rank #4 (Sell) stock and hopefully, result in its intended recovery.

NVIDIA Corporation Price

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