Tesla and AMD Collaborating on Self-Driving Cars

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.

Reports began to surface that Tesla is, in fact, working with AMD to develop an AI chip for their autonomous driving. By making its own chips, Tesla would be able control costs, something it will need to do to meet its CEO-imposed deadline of fully automated cars by 2019.

According to CNBC, Tesla, Inc.

AMD shares closed up 5 percent Wednesday following the Tesla news. 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".

Shares of Nvidia were down 3.4%, near 179.65, but are up 68% for the year. Tesla has had a bumpy ride with chip providers.

AMD would help provide Tesla with development of the chip.

Steves maintained an outperform rating on Nvidia and a price target of 205.

Tesla is taking measures in decreasing its reliance on Nvidia that has supplied this electric automaker company with the future self-driving system and the graphics processing units power Autopilot of Tesla.

"The Tesla/AMD move has disruptive implications to the multi-billion self-driving market", said Rosenblatt Securities in a note entitled "Tesla AI Move With AMD - Game Changer".

Then, in May 2016, a dedicated Tesla owner was killed in a Florida crash when his Tesla Model S, operating on Autopilot, hit a tractor-trailer rig broadside and passed under it, shearing off the roof.

"The Tesla/AMD move has disruptive implications to the multibillion self-driving market as Intel has spent enormous amounts to get into the space with limited success in our opinion", Mosesmann wrote.

Tesla is expected to come up with its first-ever autonomous auto with self-driving capabilities in 2019. It is a double-slap in the face to Intel which has been courting Tesla to no end.

Mosesmann maintained a buy rating on AMD and price target of 22.