Tesla is said to shift to Intel from Nvidia for infotainment

Tesla’s Model 3 and new versions of its other cars will get the new Intel processing modules, said the people, who asked not to be identified speaking about a private agreement. (Image Source: Bloomberg)

The giant information and entertainment screens in Tesla Inc’s cars will be powered by new components from Intel Corp after the automaker replaced chip supplier Nvidia Corp for that function, according to people familiar with its plans. Tesla’s Model 3 and new versions of its other cars will get the new Intel processing modules, said the people, who asked not to be identified speaking about a private agreement. Nvidia and Intel declined to comment. Tesla declined to comment.

Cars are being made with more electronics inside, making the automotive market increasingly important for chipmakers. Nvidia’s stock has surged more than sixfold in the past two years, partly on its rising business with car makers. Most of the new revenue has come from the new dashboard systems that control entertainment and information for drivers.

Intel, the world’s largest chipmaker, is looking to lower its dependence on personal computers and persuade car makers they need its powerful processors to make vehicles capable of making more decisions for themselves. Intel doesn’t break out how much revenue it gets from that market. In its most recent quarter, Nvidia reported automotive sales of $142 million, about 6 percent of its total revenue.

Intel shares rose almost 1 percent to close at $37.47 in New York. Nvidia closed at $171.96, up 0.6 percent, after climbing as much as 4.5 percent earlier in the day. While Tesla is still one of the smaller automakers – it shipped just over 76,000 vehicles in its last financial year – it’s been at the forefront of bringing new technology to the market.

The main prize for chipmakers will be providing the computing engine that allows cars to become fully autonomous. Those systems are still in development with automakers and chipmakers announcing test programs with multiple partners. Nvidia’s chips power Tesla’s Autopilot 2 system, which handles some driving situations.