Uber goes even bigger into robotaxis with Nvidia partnership
When Gary Black, managing partner at The Future Fund, cast doubt last week on the bull case for Tesla, Inc.'s (TSLA) nascent robotaxi business, he pushed back against the Tesla bulls who "are now convinced that only TSLA will solve for unsupervised autonomy."
Black pointed to a few different reasons why the bulls "are likely to get this wrong," including the fact many of Tesla's rivals are already ahead of it in offering paid fully autonomous rides, proving that they are already solving for autonomous capabilities ahead of Tesla.
“To argue no one else can achieve generalized unsupervised autonomy flies in the face of reality,” Black said.
And he also noted another potential headwind facing Tesla: Nvidia Corporation (NVDA) is planning to provide fully autonomous hardware/software stacks to its competitors.
That point was driven home on Monday when Nvidia and Uber Technologies, Inc. (UBER) announced a plan to launch a global fleet of NVIDIA software-driven autonomous vehicles (AV), starting in Los Angeles and San Francisco in the first half of 2027.
The two companies will then scale the launch across 28 cities globally by 2028.
The announcement this week is an expansion of the partnership they formed in October
Uber and Nvidia said this week that they are working with a "growing roster of automaker partners" on the AV strategy. Nvidia will be deploying its NVIDIA DRIVE Hyperion autonomous vehicle platform and NVIDIA Alpamayo, which is its next-generation reason-based AI model for autonomous vehicles.
According to Nvidia, the Alpamayo engine is designed to handle complex "long-tail" scenarios, "such as unpredictable construction zones or erratic pedestrian behavior" by using chain-of-thought logic. This marks Nvidia's move into being a full-stack Layer 4 (L4) software provider.
Layer 4 autonomy is when a vehicle can operate in specific areas or under specific conditions without human intervention.
Uber and Nvidia said they plan to implement a phased deployment strategy in each of their launch cities, beginning with a fleet of data-collection vehicles that will support the training of the Alpamayo engine on city-specific driving nuances. Once this phase is completed, the fleet will move to an operator-led launch before progressing to driverless L4 deployments.
“Autonomous technology holds enormous promise to make transportation safer, more reliable, and more accessible,” Uber CEO Dara Khosrowshahi said in a statement.
“By expanding our partnership with NVIDIA and combining advanced AI with Uber’s global network and operating experience, we are laying the foundation for an increasingly multi-player AV world, ensuring broad commercialization and helping to bring robotaxi service to more riders over time.”
Uber's shares gained over 4% on Tuesday.
Uber gets protection against Waymo and Tesla
In the initial announcement of their partnership in October, Uber and Nvidia said that Stellantis N.V. (STLA) would be one of the first automakers to deliver at least 5,000 NVIDIA-DRIVE-powered L4 vehicles to Uber for robotaxi operations in the United States and internationally.
Uber will be overseeing the end-to-end fleet operations, including remote assistance, charging, cleaning, maintenance, and customer support.
“The ‘ChatGPT moment’ for physical AI has arrived—robotic systems can now reason about the complexities of the physical world,” Nvidia founder and CEO Jensen Huang said in a statement on Monday.
“Uber is building one of the world’s most expansive autonomous ride-hailing platforms. We are delighted to connect NVIDIA’s large ecosystem of robotaxi-ready partners to the Uber network to bring the magic of robotaxis to cities worldwide.”
In addition to North America, Uber and Nvidia are looking to expand to 28 cities across Europe, Australia and Asia by 2028.
BofA analyst Justin Post reiterated a Buy rating on Tesla's shares, saying in a client note on Tuesday that the Nvidia partnership will help ease concerns about Tesla and Alphabet's (GOOG) Waymo encroaching on Uber's rideshare market.
“We think a growing roster of US L4 OEM suppliers, combined with Nvidia's L4 platform development commitment, can shift the medium-term US AV supply outlook in a more favorable direction for Uber, driving stock multiple expansion,” Post said.
Uber also announced three other initiatives last week to boost its AV strategy, including partnerships to deploy both Amazon's (AMZN) Zoox and Hyundai Motor Group's all-electric Motional IONIQ 5 robotaxi on its app.