NVIDIA Corporation (NASDAQ:NVDA) has held close ties with Tesla Inc (NASDAQ:TSLA). This week brings news about the two companies watering down their partnership. The Elon Musk corporation is jumping in bed with another chipmaker for its cars. That would normally leave a sour taste in the mouths of NVIDIA investors. However, more exciting developments are in place for the king of graphics processing units. Learnbonds looks at the loss of the EV giant and why it does not bother shareholders.
From the day the Model S rolled out, NVIDIA powered its car infotainment systems. The same goes for the Model X SUV. Now, Tesla owners will soon find another chipmaker powering the commands behind the giant monitors before them. That company is Intel Corporation. Oddly though, NVIDIA shares are not flinching. The company announced a host of greater developments in the east this week. Combined, they mean more than enough confidence behind the corporation and its capacity to thrive.
Bloomberg was among the first to announce that Tesla Inc. is changing from the status quo. The energy technology major took on the services of Intel. Sources close to the matter say the new Model 3 will be the first to use the Intel processors. Over time, the car business’ other models will join the transition, too. What inspired the shift is unclear. What is clear is that Tesla will be better for it, and NVIDIA isn’t fazed either.
That is a lot more confidence than what NVIDIA got when a rumor about Tesla turning to AMD came up last week. Share values depleted by a lot at the mere hint of the revived chip company eyeing the AI application processes of Tesla. The rumors have yet to be proven. However, this week’s news adds weight to idea that Elon Musk now needs cheaper components for his growing car fleet.
The NVIDIA partnership with Tesla Inc (NASDAQ:TSLA). is more or less about appearances. Well, save for the two firmsfirm powering the most efficient AI systems on the Green500. Other than that, it is about high-end cars needing high-end GPU systems. And there are few companies in league with NVIDIA Corporation (NASDAQ:NVDA) in that department.
While more sales is always a great thing, the car maker was not looking to sell hoards of cars with its high-end cars. All of that changes with the Model 3. With this latest roll-out, the aim is high-volume sales at minimal costs. The term low-cost is far from an appropriate description of NVIDIA processors.
NVIDIA okay with Tesla Inc. leaving
It is safe to say that the bottom line matters a lot more now. This means cheaper suppliers, suppliers like Intel Corporation and AMD. The adoption of Intel Corporation as a supply partner would be proof of this. Factor in Intel’s achievements with other car makers like the recent Waymo deal and this week’s news grows plausible.
The shares of NVIDIA Corporation look upon this rumor with great indifference. Wednesday sees the corporation in the green, poised to outdo the 190 percent climb seen over the last 52 weeks. There is no doubt that the loss wouldl be significant. Tesla abandoning ship could even even inspire others to jump on the Intel bandwagon.
Monday had the Nvidia Corporation CEO, Jensen Huang, announce that the company will supply its AI-focused GPU hardware to major of Chinese cloud service. The deal also includes several server-hardware makers, as well as new opportunities.
NVIDIA Corporation (NASDAQ:NVDA) shares were up over one percent leading into midday trading. The year so far features a near 200 percent climb for NASDAQ:NVDA.