Nvidia (NVDA) Stock: Chipmaker Pushes Into Robotaxi Market With 2027 Target

TLDR

• Nvidia plans to power robotaxi fleets with its AI chips and Drive AV software by 2027, targeting Level 4 autonomous vehicles that can drive without human intervention in specific regions.
• The company’s automotive and robotics division currently generates only $592 million in quarterly revenue, representing about 1% of total revenue.
• Nvidia CEO Jensen Huang announced the next-generation Vera Rubin chip platform is in full production, claiming five times better AI computing performance than previous chips.
• The Drive AGX Thor automotive computer costs about $3,500 per chip and is being adopted by Mercedes-Benz for 2026 model releases.
• Nvidia demonstrated Level 2 Plus Plus self-driving technology in San Francisco, with the system controlling the vehicle 90% of the time but requiring driver intervention in complex traffic situations.

Nvidia revealed plans to supply AI chips and software for robotaxi operators by 2027. The company aims to power Level 4 autonomous vehicles through its Drive AV software stack.

NVIDIA Corporation, NVDA

Xinzhou Wu, Nvidia’s vice president of automotive, announced the timeline during a demonstration in San Francisco last month. Level 4 vehicles can drive without human oversight in specific geographic areas.

The robotaxi push represents a small but growing business segment for Nvidia. Automotive and robotics chips brought in $592 million last quarter. That accounts for roughly 1% of the company’s total revenue.

Nvidia has sold car technology under its Drive brand since 2015. The company formed a robotaxi partnership with Uber in October 2024.

Mercedes-Benz models launching in late 2026 will use Nvidia technology to navigate cities. The German automaker will sell the feature as part of its in-car experience.

Self-driving technology serves as a key growth area outside of Nvidia’s core AI infrastructure business. CEO Jensen Huang called robotics the company’s second most important category after artificial intelligence.

Hardware and Software Strategy

The Drive AGX Thor automotive computer costs approximately $3,500 per chip. Nvidia markets the system as a way for carmakers to reduce research costs and speed up development.

The company also sells access to its AI chips and simulation software. Automakers use these tools to train self-driving models.

Car companies can customize Nvidia’s technology for their vehicles. This includes adjusting acceleration patterns and other driving behaviors.

Ali Kani, general manager of Nvidia’s automotive platform, said some manufacturers handle their own simulation work. Others request help with training and optimization.

Alphabet’s Waymo currently leads the commercial robotaxi market. The service operates without drivers in five U.S. cities including San Francisco.

A December test drive in San Francisco showed the current state of Nvidia’s technology. A 2026 Mercedes-Benz CLA sedan drove autonomously for 90% of an hour-long journey.

The safety driver took control once when two buses and a Waymo vehicle created a traffic jam. The driver backed up the car and waited for the obstruction to clear.

Nvidia classified the demonstration as “Level 2 Plus Plus” technology. This category puts full safety responsibility on the driver, similar to Tesla’s Full Self-Driving mode.

Next Generation Chip Platform

Huang announced the Vera Rubin chip platform entered full production. The new system delivers five times better AI computing performance for chatbots and other applications compared to previous chips.

The flagship Vera Rubin server contains 72 graphics processing units and 36 central processors. These can link together into pods with over 1,000 chips.

The company claims a 10-fold improvement in token generation efficiency. Tokens serve as the fundamental unit of AI systems.

Vera Rubin uses proprietary data formats to achieve its performance gains. Huang noted the chips contain only 1.6 times more transistors than previous models.

CoreWeave will receive the first Vera Rubin systems. Microsoft, Oracle, Amazon, and Alphabet are expected to adopt the platform.

Nvidia faces growing competition from AMD and Google in the AI chip market. Google developed its own chips and works with Meta Platforms to challenge Nvidia’s position.

The company acquired talent and technology from startup Groq last month. The deal included executives who helped design Google’s AI chips.

Huang told analysts the Groq acquisition won’t affect core business operations. The deal may lead to new products that expand Nvidia’s lineup.

Demand remains strong for H200 chips in China. CFO Colette Kress said the company applied for licenses to ship chips to China but awaits government approval.

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