Video card manufacturer NVIDIA (NVDA 151.75, -0.40) is one of the key players on the front lines of the ongoing race to bring autonomous driving software to the mass market. Today, the company, which already has deals in place with Audi, Toyota, and Mercedes, announced yet another partnership with a major automaker to develop driving software.
NVIDIA's autonomous driving platform receives inputs from various scanning devices like cameras, radar, lidar, and ultrasonic sensors. The inputs are then analyzed and synthesized into a visual representation of the surroundings that can be understood by the on-board computer, allowing for navigation around the observed obstacles. NVIDIA's edge in the space comes from its dominance of the video card market, considering GPUs serve as the "brain" of autonomous driving systems.
Unlike central processing units (CPUs), which order tasks by hierarchy and work on one item at a time, video cards or graphics processing units (GPUs) can process multiple strings of data at once. This allows the system to simultaneously spot multiple changes around the vehicle as opposed to identifying the changes one at a time.
This morning, investors learned that NVIDIA's technology will also be used to develop driving software for Zenuity, which is a joint venture set up by Swedish automaker Volvo and car safety supplier Autoliv. Volvo expects fully autonomous cars will be on sale by 2021.
During the first quarter, NVIDIA's auto revenue totaled $140 million, which increased 23.9% year-over-year and made up 7.2% of total quarterly revenue.
On a somewhat related note, Volkswagen announced this morning that it is cooperating with NVIDIA in hopes of expanding its competence in the field of deep learning. Deep learning refers to insights and patterns extracted from the analysis of massive amounts of data. Once again, GPUs are better suited for this task than CPUs, giving NVIDIA an inherent advantage.
Investors have been well aware of NVIDIA's strong fundamental position, evidenced by the big rally in the stock, which is up 43.0% for the year after surging 227.0% in 2016.