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Nvidia CEO Applauds Tesla's Lead in Self-Driving Tech, Boosting Chip Demand

Nvidia (NVDA) CEO Jensen Huang has lauded Tesla's advancements in self-driving technology, emphasizing the company's significant lead in the field. 

Tesla's (TSLA) Full Self-Driving (FSD) system, currently in its 12th version, utilizes Nvidia's powerful chips to drive its revolutionary autonomous capabilities. "Tesla is far ahead in self-driving cars," Huang stated in a recent interview, highlighting the innovative use of generative AI to learn from video data and predict driving paths.

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Tesla's FSD, still in beta, has accumulated over 1.3 billion miles since its launch in March 2021. Despite being a Level 2 autonomous system requiring driver supervision, its cutting-edge technology continues to push the boundaries of what is possible in self-driving cars. Tesla offers FSD at $99 per month or a one-time fee of $8,000, with recent free trials sparking increased interest and adoption.

Nvidia's Expanding Automotive Ventures Show Promising Growth
Nvidia's involvement in the autonomous driving sector extends beyond Tesla. The chipmaker collaborates with major automotive manufacturers like Mercedes, Jaguar Land Rover, Volvo, and Hyundai, as well as Chinese EV companies such as BYD and NIO (NIO). Nvidia's automotive revenue reached $329 million in the first quarter, showing sequential and annual growth, although it remains a small portion of the company's $22.6 billion data center business. Nvidia CFO Colette Kress predicts automotive will become the largest enterprise vertical within the data center segment this year, potentially growing into a multibillion-dollar business.

The demand for advanced computing power in autonomous vehicles underscores the broader trend towards AI integration across industries. Huang envisions a future where every car will possess some level of autonomous capability, necessitating massive computing resources. To support Tesla's extensive data processing needs, Nvidia has aided in expanding its FSD training AI cluster to 35,000 Nvidia Hopper H100 GPUs.

AI Revolution Drives Nvidia's Data Center Sales to New Heights
Nvidia's prowess in AI extends well beyond the automotive sector. The company's data center sales, driven by the AI revolution, accounted for $22.6 billion of its $26 billion total revenue in the first quarter. This segment's rapid growth highlights Nvidia's central role in transforming traditional data centers into "AI factories," as described by Huang. These facilities aim to produce AI at an unprecedented scale, promising significant productivity gains and efficiency improvements across various industries.

Wall Street analysts remain bullish on Nvidia's prospects. JPMorgan recently raised its price target for Nvidia to $1,150 from $850, forecasting a 20-30% annual growth rate for its data center business and an additional $14 billion in automotive revenue over the next few years. Nvidia's dominant position in the AI chip market and its extensive partnerships place it at the forefront of the ongoing AI and autonomous driving revolutions.

Tesla and Nvidia's collaboration exemplifies the symbiotic relationship between cutting-edge software and powerful hardware in advancing autonomous driving technology. As the demand for self-driving cars and AI-driven solutions grows, Nvidia's role as a key enabler of these innovations will likely continue to expand, reinforcing its status as a leader in the tech industry.

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