Tesla, AMD May Be Teaming Up to Build Autopilot Chip for Cars

Tesla and AMD tipped in development of AI chip for autonomous cars

Tesla teams up with AMD to develop its own AI chip for self-driving cars

The report indicated that Tesla was on a mission to develop its own chip for autonomous cars in order to be more vertically integrated, but that Tesla was potentially relying on building that "on top of AMD intellectual property".

The chip was developed by Tesla's Autopilot group, a team of about 50 engineers under Jim Keller, a veteran microprocessor designer who led work on AMD's Zen x86 processor.

GlobalFoundries said in a statement that the company does not comment on customers or potential customers, and denied that Jha said the company was working directly with Tesla.

"The Tesla/AMD move has disruptive implications to the multi-billion self-driving market", said Rosenblatt Securities in a note entitled "Tesla AI Move With AMD - Game Changer".

Now there is speculation that Tesla will not be relying on Nvidia anymore as the electric auto manufacturer is aiming to move its chip development in-house. AMD could use the business, and purpose-built silicon could help Tesla achieve its goal of delivering a complete autonomous driving experience.

Elon Musk, CEO of Tesla, said that transitioning from the reliance was a "tough slog" on the vision chip of Mobileye. RBC maintains an Outperform rating on Nvidia and a Neutral rating on Tesla.

Mark Lipacis, an analyst at Jefferies, thinks the Tesla partnership is a "critical win" for AMD, but that it's only the first step for the company if it really wants take on Nvidia. Its shares are up another 1.3 percent in Thursday's premarket session on the bullish Wall Street reaction.

Shares of Nvidia were down 3.4%, near 179.65, but are up 68% for the year.

Lipacis also comments on Nvidia (NASDAQ:NVDA), which was bumped to the side in favor of AMD, saying that near-term headline risks aren't favorable but he doesn't see a long-term risk.

The US house repeated a "buy" on AMD and $19 price target for the stock.

Tesla might soon have a new AI chip built specifically for its cars to bring the Autopilot system to full-on self-driving status, and it's probably getting help.

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