Mercedes-Nvidia deal announced last week: Do you see the pivot? Privately-owned passenger vehicle autonomy is out, but automated is in...
If I’m terrible at telling jokes, I’m even worse at writing them. Just take a look: How many commas does it take to make a unicorn? Three. See, not even funny. How about this one: Why did the VC investor cross the road? Because their self-driving portfolio had crashed. Okay, I quit.
But I’ve got nothing on Nvidia and Mercedes who just announced plans to develop the most sophisticated and advanced computing architecture ever deployed in an automobile. Wow. You can watch the whole presentation here — don’t forget the popcorn.
With serious faces Nvidia CEO Jensen Huang and Mercedes-Benz Head Ola Källenius talk about “enabling state-of-the-art automated driving functionalities.” This includes — wait for it — “the ability to automate driving of regular routes from address to address.” Under the agreement, they will develop “autonomously assisted” (sic) vehicle applications that include SAE level 2 and 3, as well as automated parking functions (up to level 4).”
Did you catch the pivot? Privately-owned passenger vehicle autonomy is out, and automated is in. Cars won’t drive themselves anytime soon and the human driver will be liable at all times. The trouble for Nvidia is that for L2 vehicles — or L2+ if we are specifically talking about a hands-free highway assist feature — you don’t need the most sophisticated and advanced computing architecture ever deployed in an automobile. Let’s look at some examples:
There is no shortage of design and development work for assisted and automated driving at other semiconductor suppliers beyond Nvidia, such as Infineon, Mobileye (Intel), NXP, Renesas, Texas Instruments, Toshiba and Xilinx, so there is something else at play here beyond a very cleverly crafted and carefully worded press release. Let’s take a look at what is in the partnership for Mercedes and Nvidia and see if it tells us anything.
What’s in it for Mercedes?
In a word: Survival. Here’s a picture I took at the Frankfurt Auto Show in September last year (my photographic skills are about as good as my jokes, but that is another matter).
I walked around that car several times and this is the sensor suite: 6 lidars, 16 cameras, 5 radars and 30 ultrasonic sensors. That’s where Mercedes’ automated driving development was towards the end of last year. Let’s be polite and call it a cul-de-sac.
Making cars is a highly competitive business, so let’s look at developments outside of Stuttgart for some more clues:
As the pieces of the automated driving puzzle fall into place, Mercedes seems not only to have no obvious technology development program of its own, but it could very well be four years behind the Blue Oval — we’ll know more when Ford launches the latest generation F-150 truck later this week. That’s all pretty humiliating for a premium car maker and supposed technology leader.
What’s in it for Nvidia?
“Those who cannot learn from history are doomed to repeat it”
We are now witnessing the commoditization of automated driving, and Nvidia just scalped Mercedes. Well played, Jensen. As a tech analyst I’ve seen this scenario play out many times before: PCs, smartphones, cameras, DVD players, to name a few. Standards settle, functionality is fixed and then it just becomes a race to the bottom.
Nvidia is supplying Mercedes with the Orin chip and the automated driving software. What is Mercedes bringing to the party, other than its good name and reputation? Nvidia’s strategy is already focused on China and the announcement says nothing about Mercedes exclusivity. Next stage, Nvidia licenses the technology to every Chinese new energy vehicle (NEV) maker.
What do we have here? It’s the IBM PC all over again, and history tells us what happened to the box maker (IBM), the processor supplier (Intel) and the software supplier (Microsoft); and it’s smartphones all over again and history tells us the winners were the chip suppliers (Apple, Qualcomm, Samsung) and the software suppliers (Apple and Google).
For both PCs and smartphones, the winning box makers were all Chinese OEMs, such as Foxconn, Huawei and Lenovo. Does anyone even care what happened to Blackberry, Motorola or Nokia?
This is a story about Elon Musk. He quickly dropped two innovation bombs on the automotive world, first with electrification of the powertrain, then with Autopilot. We can now see which premium automaker was so bamboozled by the pace of technological development that they crashed the car.
Mercedes, now possibly four years behind Ford, just bet the house on a partnership with Nvidia and a chip not yet even in production or automotive qualified. What could possibly go wrong? Well the EU General Safety Regulations fully come into effect in 2024 — the year Mercedes plan for the new system to enter production — and it is now not clear what value-add Mercedes can offer over Chinese NEV makers using the same Nvidia platform.
In poker, if you can’t figure who the sucker is, the sucker is you. So, the joke is on you, Ola, and I thought my jokes were bad. And what is an “autonomously assisted” vehicle anyway, Jensen?