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AI and partnerships aim to reduce costs and speed

deployment

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Western automakers pressured by China's autonomous driving

advancements

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Nvidia's ( NVDA ) open-source platform seen as Tesla rival

By Abhirup Roy

LAS VEGAS, Jan 9 (Reuters) -

The short history of the self-driving car industry has been

littered with expensive failures and endless delays, but tech

suppliers, chipmakers including Nvidia ( NVDA ) and some automakers are

betting on AI and a web of partnerships to spark new progress.

Many interested automakers, however, still have major

questions. Apart from concerns about high costs and scalability,

they want to know if there is enough customer demand to make

money out of an expensive wager.

Vehicles that drive ‌themselves would change the

transportation landscape, but making such a technology safe for

public roads has been harder and much more expensive than

expected.

While a few companies such as Alphabet's Waymo and

Tesla have decided to do it themselves, veterans such

as General ​Motors and Ford Motor ( F ) have abandoned

their in-house efforts for fully autonomous vehicles.

At the CES show in Las Vegas this week, AWS and German supplier

Aumovio announced a deal ‍to support the commercial

rollout of self-driving vehicles, while autonomous truck firm

Kodiak AI and Bosch said they have partnered to ⁠ramp up

manufacturing of autonomous trucking hardware and ⁠sensors. AI

chip company Nvidia ( NVDA ) rolled out its next-generation

platform which will be used in a robotaxi alliance announced by

Lucid Group ( LCID ), Nuro and Uber ( UBER ).

Powered by Nvidia's ( NVDA ) chips, Mercedes-Benz said this

week it will launch a new advanced driver-assistance system ‌in

the United States later this year that lets its vehicles operate

autonomously on city streets under ​driver supervision.

The propulsive force behind self-driving technology --

artificial intelligence - is also coming into its own as a

development tool, offering hopes of mitigating high costs.

AI and generative AI are acting as a "big accelerant" for

the industry "because it actually allows ... a significant

amount of development and validation with significantly fewer

resources," ⁠said Ozgur Tohumcu, general manager for automotive

and manufacturing at Amazon's ( AMZN ) cloud unit Amazon Web

Services.

Western ‍automakers are also under ​pressure to keep up with

China's push to lead the development and adoption of autonomous

driving. Just last month, the Chinese government approved two

cars with Level 3 autonomous capabilities, which allows

hands-off driving. The auto industry has defined five levels of

autonomous driving, from cruise control at Level 1 to fully

self-driving, without ‍a human minder needed, at Level 5.

Still, Jochen Hanebeck, CEO of German chipmaker Infineon

, cautioned against "market fantasy" that somehow

fully self-driving cars could become commonplace within a few

years.

Rather than risk fresh investments in fully self-driving,

major automakers want revenue-generating driver assistance

technology, known as Level 2, that is already available but

requires drivers to pay constant attention, he said.

"I don't see, really now, a tsunami flowing towards Level

5," Hanebeck said.

In recent months there has been a flurry of small robotaxi

deployments announced in China, the United States, Europe and

the Middle East, but Jeremy McClain, head of system and software

at Aumovio's autonomous mobility unit, said that expanding the

areas they cover requires more data, fleets and logistics,

"which is costly ​and expensive."

'MAKES US ‍FEEL LIKE WE'RE THERE'

The self-driving car industry is long on hype.

Tesla CEO Elon Musk promised in 2019 that a year later

the electric vehicle maker would have a million self-driving

cars on the road. But Tesla launched a small robotaxi trial

service only last year, six years after Musk's bold

prediction.

The problem ​was that cars face billions of potential

unexpected incidents, or "edge cases," that can easily fool

self-driving vehicles. One example often touted by experts is

that if a human driver sees a ball rolling into the street, they

automatically slow because it might be pursued by a child - but

a self-driving car will react only when it sees the child.

After the first self-driving bubble burst, major automakers

including Ford and GM abandoned money-losing autonomous vehicle

units. The demise of GM's Cruise was accelerated by an incident

in which it struck and dragged a pedestrian 20 feet (6 meters).

But Ali Kani, general manager of the automotive team at

Nvidia ( NVDA ), said AI has enabled advances to address key weaknesses

in self-driving technology.

"There's some foundational pieces of technology that make us

feel like we're there," Kani said.

Morgan Stanley analysts in a note ​on CES said that while

Nvidia's ( NVDA ) new Alpamayo platform for self-driving would give

legacy carmakers a leg up and help them pressure Tesla, the EV

maker was years ahead. That said, many in the industry see

Nvidia ( NVDA ), whose platform is open-source, as a convenient place for

Tesla rivals to gather.

"In one way, you could almost see Apple ( AAPL ) and Android

playing out," said Russell Ong, former product lead at

self-driving vehicle maker Zoox, referring to Tesla's

proprietary system ‍versus Nvidia's ( NVDA ) decision to release Alpamayo

as an open-source model.