Tesla Is Allegedly Partnering With AMD to Build Its Own Autonomous Chips

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Analysts are increasingly more bullish on AMD's technology and potential in the critical artificial intelligence market following the news Tesla is using the company's intellectual property.

AMD shares shot up after CNBC reported that the company is working with Tesla.

No schedules for launch of any such chip were given in the report, and GlobalFoundries declined to confirm its CEO's assertion that it was working with Tesla. For Tesla, this is the firs ttime they've opted for a objective built AI processor, which will be using both AMD and Tesla IP.

AMD would help provide Tesla with development of the chip.

Tesla's autopilot business is run by Jim Keller, who previously spent much of his career at AMD, and then at Apple, where he helped design the Apple A4 and A5 in-house processors.

Green Car Reports has reached out to Tesla for comment; if the company replies, we will update this article.

After hiring Andrej Karpathy as its new head of AI and Autopilot Vision, earlier this year, auto maker Tesla hopes to make a mark in the autonomous vehicle market and compete with the likes of Google and Samsung.

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It's likely, however, that AMD and Tesla are working together based exclusively on some hires that Tesla has been making.

Tesla or AMD have not commented on the rumors.

The Tesla/AMD report came shortly before the market close Wednesday, boosting AMD shares nearly 4%.

Currently Tesla is looking to kit out all current models of their electric cars with the technical capability to perform an autopilot function, although a software update at some point in the future will be required in order to make the cars actually capable of driving around their passengers without input. RBC maintains an Outperform rating on Nvidia and a Neutral rating on Tesla.

AMD shares are up 1.89% premarket. Nvidia fell on the news and is down 2.03% on Thursday.

"Overall, we think Nvidia remains as the primary workhorse/engine while AMD chips are used for specific applications to avoid giving Nvidia 100% of the AI content in self-driving vehicles", Steves wrote.

Mosesmann, who's a Buy rating on AMD shares, and a $22 price target, and who also rates Nvidia (NVDA) a Buy, doesn't discuss Nvidia in the note.