AMD would help provide Tesla with development of the chip.
The first samples of the AI chip processor have been received by Tesla and are now undergoing tests by the electric auto making company, according to a source from CNBC. By making its own chips, Tesla would be able control costs, something it will need to do to meet its CEO-imposed deadline of fully automated cars by 2019.
Currently, the carmaker uses Nvidia chips to power their self-driving technologies. But the company is also always iterating on its hardware, eschewing the traditional model year upgrades of legacy automakers.
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However, AMD designs its chips and is said to have shipped samples to Tesla of its first implementation of a processor infused with artificial intelligence technology designed for autonomous vehicles. After reports emerged of the two collaborating on self-driving technology, AMD's share price shot up almost 5 percent and continued its ascension in after hours trading. Nvidia has been a key chip supplier to Tesla, and Nvidia's shares are up 68% this year. Most recently, its supplier Mobileye didn't renew the contract with Tesla in the aftermath of the death of a Model S owner - autopilot was activated on that vehicle. According to Steves, there is plenty of Tesla business for both Nvidia and AMD, and the AMD news is just noise for Nvidia (see his track record here).
As per the report, Tesla is now digging its hands into AMD, the semiconductor Company.
At present, Tesla's Autopilot system relies on Nvidia GPUs.
Lipacis says the Tesla shipments won't have a near-term impact on AMD's bottom line but calls the deal a "critical win for AMD" that supports the firm's belief the company will benefit from the next big thing in technology.