Credit: Shutterstock photoTrue to form, Tesla (TSLA) CEO Elon Musk made a grandiose announcement recently, saying all Tesla cars from now on will have everything they need for self-driving. While Tesla, its customers, and its investors like what they hear, see, and experience, the real winner from the announcement is likely to be Nvidia.
During the announcement, Musk revealed that the new GPU in the car is Nvidia Titan, though Musk said choosing Nvidia (NVDA) over AMD (AMD) was "a close call."
This is important for several reasons, the first of which that Tesla cars basically have a "supercomputer" -- as Musk described it -- inside of them, as the "Tesla Neural Net" is 40 times more powerful than the last computer inside a Tesla. That's tremendous computing power for what is essentially machine learning inside of a car to help run the eight cameras (up from one), the 360-ultrasonic sonar and the 12 ultrasonic sensors that are able to detect an object that's both hard (for example, a car) and soft (for example, a human).
Unfortunately, for older Tesla customers, the new features won't be available as a kit for them to buy, so they'll likely have to trade in their cars or buy new ones, once the testing has been done, which will take "millions of miles of real-world driving" according to Musk.
Musk added that while the new hardware will be standard on all new Teslas going forward, it will cost an additional $8,000 to enable the software to make it work.
In an investor presentation earlier this year, Nvidia said it expects to see 75% revenue growth from its automotive efforts, part of which is included from Tesla. In total, it sees $6-$10 billion of opportunities from automotive initiatives (digital cockpit, self-driving, transportation-as-a-service), including $2 billion from self-driving cars, which is what Tesla has now, except at a much higher level than anything else out there.
What Tesla and Musk announced is not easy to do, but companies like Uber, BMW, Google and others are cranking up the race for autonomous driving, which will also lead to additional opportunities for machine learning, both of which need to be powered by GPU's.
Tesla's validation of Nvidia is a good sign for the semiconductor company going forward, potentially leading to more design wins down the road.
The age of the GPU is in full effect, with self-driving cars and machine learning leading the way and despite Nvidia's enormous run in 2016, it's likely shareholders will continue to see more growth ahead.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
