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NVIDIA’s Long-Term Data Center and Automotive Growth Drivers


May. 29 2019, Updated 3:09 p.m. ET

NVIDIA’s data center alternatives

NVIDIA (NVDA) is a leader in data center AI. The company has transitioned from offering general-purpose GPU[1.graphics processing unit] accelerators to accelerated computing platforms. An accelerated computing platform needs strong connections for processors, storage, and networks. NVIDIA is set to acquire Mellanox to offer computing engines that can deliver optimal performance at lower operating costs. NVIDIA expects to complete the acquisition by the end of this year.

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DRIVE Constellation

NVIDIA has also launched DRIVE Constellation, a platform designed specifically to train AVs.[2.autonomous vehicles] The platform uses two servers: one to run a simulation environment to train cars, and the other to drive cars. DRIVE Constellation revenue will form part of NVIDIA’s data center segment.

DRIVE Constellation is expected to drive NVIDIA’s data center revenue from next year, when robotaxis hit the market. During NVIDIA’s fiscal 2020 first-quarter earnings call, CEO Jensen Huang stated that the economics of robotaxis could start reflecting in its earnings in calendar 2020 and 2021.

NVIDIA’s automotive business

NVIDIA’s shift to AVs is driving its semiconductor content per vehicle. NVIDIA’s automotive revenue rose 14% YoY (year-over-year) and 2% sequentially to $166 million in the first quarter of fiscal 2020. The company is just entering AVs now and seeing more AV development deals.

Huang stated that NVIDIA’s technology is being used in several electric vehicles in China and robotaxi developments around the world. He highlighted NVIDIA’s partnership with Toyota, wherein the automaker plans to use its complete end-to-end AV solution.

NVIDIA’s automotive strategy

Huang said that AVs could form a $30 billion addressable market by 2025, as NVIDIA’s automotive strategy offers solutions from the data center to the car. He added that NVIDIA’s automotive strategy has four components: AI computing, the DGX supercomputing infrastructure, the DRIVE Constellation platform for training, and in-car AV computers. Huang stated that NVIDIA plans to expand its automotive strategy to robotics and edge computing.


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