Report: Tesla snubbing Nvidia, developing its own self-driving chip

Enlarge / Tesla CEO Elon Musk. (credit: Yuriko Nakao/Bloomberg via Getty Images)

Tesla is working on custom silicon for its self-driving software in partnership with AMD, CNBC reported Wednesday. "The carmaker has received back samples of the first implementation of its processor and is now running tests on it," a source told CNBC. Shares of AMD soared more than six percent on Wednesday after news of the partnership leaked.

Tesla has been working to beef up its in-house hardware capabilities over the last year after going through a nasty divorce with Mobileye, a leading supplier of self-driving hardware and software, a year ago. Mobileye had supplied the hardware for Tesla's first-generation Autopilot technology, but the two companies went their separate ways after a Tesla customer died in a crash that occurred while Autopilot was active.

Since the split, Tesla has built a new Autopilot technology stack using non-Mobileye hardware, including Nvidia graphics processors. Developing chips in-house will make Tesla less reliant on Nvidia in the future, according to CNBC, and Nvidia stock fell almost 4 percent on Wednesday evening after the news broke.

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