In program management, that’s called a “work-back schedule.” You can think of it like preparing for a camping trip: You have to buy rain gear before you can pack it. Cars and chips are the same way. If you want them by a certain date, you have to subtract out the production time. Seeing the Volta chip in the hands of Nvidia CEO Jen-Hsun Huang at this year’s CES and knowing that both Bosch and Audi are relying on this part, we know it’s in sampling now. After sampling comes low-rate production, then high-rate production. That carries us into 2020... and a self-driving car. This Volta chip is the size of a postage stamp. And our risk was that it would never be built. Now, we’ve seen it... and seen it working. After we saw Huang’s presentation and heard from Nvidia’s automotive vice president at this year’s CES, we met the company’s senior director of automotive technology and saw the car drive on a track. The car – without a driver – could drive safely through construction zones, sand, dirt, and messed-up lane lines painted on the road... all with one camera. We know that as you add more and more cameras – and radar – to a car, it gets smarter. Plus, if you match the camera feed and radar to a map, accuracy improves even more. That’s what Audi will build into its 2020 cars. But Audi has been making cars for 115 years. The new part is the car without the driver... and that’s from Nvidia.
Even if you aren’t sold on the benefits of a car that drives itself, this technology is also a highly advanced cruise control to deal with abrupt wind gusts or a fog bank that human eyes cannot see through. Plus, all these smart cars will be connected using mobile-phone technology. So if one car hits an ice patch, all the other cars will know about it. In the end, Nvidia’s technology will make us all better drivers and make roads safer. Which is an incredible accomplishment from a video-game company. Nvidia trades like a mature tech-growth company... It has a well-developed graphics-card business and invests in new markets... A great analogy would be Alphabet (GOOGL) with its search business that makes the money and its side projects – like driverless cars – that provide upside opportunities. That’s good company to be in. For Nvidia, its steady growth comes from the gaming sector... And its breakout opportunity is a brand-new market in automotive driver- assistance technologies, ultimately yielding a self-taught, self-driving car. Here’s the implication: When machines begin learning for themselves, it will be a watershed moment in human history. And as we said, these “artificial brains” will bring huge profits to early investors. WHAT’S THISWORTH TO NVIDIA?
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