The news that Tesla may use Advanced Micro Devices intellectual property to produce the chip sent AMD stocks rising almost 5 percent Wednesday and continuing to rise after the trading day closed, CNBC reported.
Working with AMD to build a self-driving processor will allow Tesla to rely less on other companies - although its new chip will reportedly be based on AMD intellectual property.
A 50-person team is reportedly working on the chip, headed by former Apple and AMD chip designer Jim Keller, who joined Tesla from AMD a year ago.
"The Tesla/AMD move has disruptive implications to the multi-billion self-driving market", Rosenblatt Securities' Hans Mosesmann wrote in a note entitled "Tesla AI Move With AMD - Game Changer" Wednesday.
According to CNBC, Tesla, Inc.
Will you take a ride in Tesla's autonomous auto?
Early a year ago, with promises of self-driving cars in owners' hands well before any competitor, development of the Tesla Autopilot system for the maker's electric cars was proceeding nicely. "The net/net here for AMD is that Tesla has confirmed AMD's CPU and GPU roadmaps in a field that nobody was considering as viable; it says that AMD's CPU/GPUs in PC and server markets are the real deal", he added.
Following reports, AMD's shares have climbed 6.40% to $14.62 although Tesla's have remained stable.
This allows the electric vehicle company to "create a technology that can do precisely what it wants to achieve", the website says, such as "true autonomous driving". In fact, the news until now Steves dismisses as "unsubstantiated" anyway; but even if true, whether AMD capture market share or not steal Nvidia's prime spot as "market leader". He said that the Tesla partnership will likely only impact AMD's earnings by $0.02-0.03 in 2018.
The US house repeated a "buy" on AMD and $19 price target for the stock.
Currently, the carmaker uses Nvidia chips to power their self-driving technologies.