Exclusive: Nvidia's Alpamayo Could Help Automakers Catch Up On Autonomy, Analyst Says

With the introduction of Nvidia Corp's (NASDAQ:NVDA) self-driving technology, dubbed the Alpamayo, Frank McCleary, partner at Arthur D Little, shared his insight into what it could mean for the auto industry.

Nvidia's Technology Could Help OEMs

When asked if the technology could help OEMs offer autonomy, McCleary said that it was possible to a certain extent. "I think it would help OEMs, as well as robotaxi operators that are not as far along," McCleary said. He added that the technology could also provide a "significantly better basis" to automakers. 

McCleary shared that the technology could also help legacy automakers like General Motors Co. (NYSE:GM) and Ford Motor Co. (NYSE:F). McCleary shared that it could be beneficial should they decide to leverage Nvidia tech. He then also shared the example of Mercedes-Benz, which announced an Nvidia partnership.

"If you look at Mercedes, they’ve been consistently, you know, collaborating with Nvidia," McCleary said. However, he added that it would be at the discretion of automakers if they needed to "reevaluate" partnerships currently in place.

Robotaxis As Personal Vehicles?

The analyst also shared that the future could see both Robotaxis and personal ownership of autonomous vehicles. "
I think you have, you have both ends of the spectrum currently pushing," McCleary said.

He shared that the likes of Tesla Inc. (NASDAQ:TSLA) and Alphabet Inc.-backed (NASDAQ:GOOGL) (NASDAQ:GOOG) Waymo were taking different approaches. " 

"Waymo has owned and partnered to manage and maintain the fleet," he said, while Tesla says that the company could let customers "buy a robotaxi or a fleet of robotaxis as a small business owner and deploy them into the fleet," or owners can buy cars and deploy them into the fleet when they're not using them.

Nvidia-Branded Robotaxis?

The analyst shared that Nvidia had "definitely evolved" from a silicon manufacturer to a company focusing on ecosystems. However, any Nvidia Robotaxis would ultimately come down to the chipmaker's "appetite." McCleary then said that he hadn't seen "indications" whether Nvidia would want to go the Robotaxi route.

"I think their primary focus is still silicon design and expansion of physical AI," he said. "It’s just not an easy business, and it’s capital-intensive, so, if I’m sitting there giving them advice, is that the first business I would go into? Probably not," the investor said.

He also shared that Nvidia's Vision-Language-Action (VLA) approach to autonomy wasn't very different from Tesla's or Waymo's, saying that the approach was trying to get a logic and reasoning stack similar to how humans operate. 

"You have your hands or your eyes as your sensors and the input is brought through the brain, where it’s processed, and then an action is derived," he shared. 

He added that many technology stacks so far utilized different stacks for different functions, but Nvidia was trying to solve this by developing a system that can think beyond "a fixed set of logic that is trained on."

Robotaxis Depends On Capital Structure Of Deployments

Sharing his view on Robotaxi, the analyst shared that deployments come down to "the capital structure" of the service. "Right now, if you look at Waymo, you take a Jaguar I-Pace," which would "cost you 70 grand," McCleary shared.

He added that an additional "100 to 150 grand" would be required, depending on the technology Waymo adds. "You’re at a $200,000+ vehicle. That’s not sustainable for most companies from a deployment perspective."

McCleary then said that companies can find a way to offset some of that cost. "If I can get everybody to buy one [Robotaxi], I don’t have to worry about capital because it’s distributed," he said.

Nvidia As A Potential Entry Point For Chinese Companies?

As Nvidia's Alpamayo technology is available as an open-source model, which means companies can incorporate it into their own autonomous ambitions, could the technology provide Chinese automakers an entry into the U.S.? McCleary said that it could potentially happen.

"You already have those plans with Waymo and Zeeker," he said, adding that Waymo has shared with U.S. regulators that it is replacing the Chinese tech with its "entire US-sourced technology stack," which would help it overcome current regulations. 

However, the analyst added that Nvidia's open-source nature could also help improve perception of Robotaxis among customers. "Making it open source creates the ability for researchers to dig into the models, to understand how they’re operating," McCleary said.

He also shared that it allows the technology an opportunity to be fine-tuned, which could give Nvidia a "leg up to drive adoption and partnerships via other OEMs," because the technology has been "validated by third parties." 

Autonomy Will Continue To Be Pushed In Vehicles

McCleary thinks that autonomous technology would continue "to get pushed into vehicles," in both "mobility and transportation systems." McCleary also touted a deregulatory environment in the U.S., which could help drive the adoption of the technology.

"The challenge is always gonna be the bad press of an adverse event," related to autonomous vehicles, McCleary said, which could force regulators to step in and make changes.

What Alpamayo Could Mean For Robotics

The Alapamayo technology could also see applications in robots used during the manufacturing process. "There is a lot of interest in adopting robotics," McCleary said, adding that Robotics doesn't necessarily equate to humanoid robots, but it remains a cost game.

"To deploy humanoid robots, you also have to rethink, at least in auto, you have to rethink manufacturing because it’s a highly repetitive task," McCleary shared. He added that there was still a certain level of "learning that’s required to get humanoids deployed more broadly in automotive assembly."

McCleary also shared that another challenge could be the fact that "vehicles aren’t necessarily designed to be assembled by [Robots]."

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