When you think about how artificial intelligence (AI) acquires the world, my mind starts to think almost immediately about how the technology influences fields, such as data analysis or drug discovery.
Although these usage scenarios tend to get the most attention, AI has also quietly played an important role in the car industry. From speech recognition assistants to the rise of autonomous driving, AI has been acquitted for the future of transport.
Let’s investigate how Nvidia(Nasdaq: NVDA) is involved in the automotive sector and assess why I see the company as my best choice Tesla At the intersection of AI and cars.
NVIDIA offers a number of products and services that are marketed in the direction of the car industry. For example, the Omnerne-Platform of the company enables companies to build digital twins of Real-World environments to simulate how vehicles can work under certain circumstances (that is, again, traffic, pedestrians who walk on the road).
In addition, the NVIDIA HALOS system combines the brand and model of a car with the right hardware and software development that is needed to bring autonomous possibilities from prototype to functioning product.
The primary role of NVIDIA in the automotive sector is to bring a technology-driven low to the production process of the car-a new wave of safety and cost efficiency.
Image source: Getty images.
According to the company’s website, NVIDIA provides AI services to a number of top companies, including, including Rivian” Toyota” Byd” Mercedes-BenzAnd Hyundai. Although this is impressive, I think that the most striking relocation of Nvidia in the car company took place earlier this month during the GTC conference of the company.
At the conference, Nvidia revealed that it collaborated with General Motors To work on a number of AI-driven solutions for his cars. As part of the deal, GM will use the NVIDIA Omniude, Cosmos and AGX platforms to build more advanced systems for drivers, and to improve production -efficiency in the GM factories.
The table below breaks down Nvidia’s income from his car segment during calendar year 2024:
Category
Q1
Q2
Q3
Q4
2024
Car -income
$ 329 million
$ 346 million
$ 449 million
$ 570 million
$ 1.7 billion
Data source: Nvidia.
The turnover from the Automotive segment of NVIDIA increased by 55% after year in 2024. With that saying, the turnover of $ 1.7 billion of this company represents only about 1% of the total turnover of Nvidia last year.
During the company’s fiscal profit in the fourth quarter, management led that the car company this year rises almost triple to $ 5 billion in income.
At present, the car segment is the fastest growing company of Nvidia outside data centers. And yet, even when explaining this fast scale, the sale of the automotive is hardly even a fraction of the entire Nvidia operation.
I see the new partnership with GM as a sign that more car companies, in particular older car manufacturers who may have been left in other catalysts who feed the car industry, such as electric vehicles (EV), are looking for ways to bring a new wave of growth and bring a new wave of growth that are supported by rising interest in AI.
When it comes to AI and cars, I can’t think of two other companies alongside Nvidia and Tesla who have the most potential advantage.
Although Tesla has made remarkable progress in his autonomous driving ambitions, a pretty solid argument can be made that the future of the company depends on a widespread acceptance of his self -driving car software. Without AI, an investor could claim that Tesla is simply a different car manufacturer and less a technology company. The car industry is very competitive and many companies are forced to compete on price to stimulate demand and sales. In the long term, such a strategy can reduce profit margins and suffocate innovation.
On the other hand, I see Nvidia as more an isolated opportunity when it comes to AI and cars. If more vehicles are equipped with AI-driven services, I think Nvidia has a clear opportunity to parlay its existing partnerships with car manufacturers to expand its overall presence in the car sector.
In other words, a long -term investment in Tesla may require a strong conviction that the company is subtracting its autonomous driving vision. Nvidia, on the other hand, does not necessarily need Tesla to succeed – because the company has the luxury to collaborate with a large number of car companies around the world who want to build their AI route maps.
For these reasons I see Nvidia as the larger beneficiary of autonomous driving and AI-driven services in the automotive industry in relation to the competition.
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Adam Spatacco has positions in Nvidia and Tesla. The Motley Fool has positions and recommends Nvidia and Tesla. The Motley Fool recommends BYD Company and General Motors. The Motley Fool has a disclosure policy.
Prediction: This company for artificial intelligence (AI) will be the largest beneficiary of self -driving vehicles (hint: it’s not tesla) was originally published by The Motley Fool
