Chip Maker Nvidia Is Buying a Mapping Start-Up. What It Means for Its Automotive Business.
Nvidia said it will acquire an autonomous-vehicle mapping start-up.
Courtesy of NVIDIA
Graphics and artificial intelligence chip maker Nvidia said Thursday it planned to acquire DeepMap, an autonomous-vehicle mapping start-up, for an undisclosed sum. The tuck-in acquisition will help improve Nvidia’s stack of self-driving technology, improving the necessary mapping and location functions.
Shares of Nvidia (ticker: NVDA) advanced 1.1% to $704.77 in early afternoon trading Friday.
“The acquisition is an endorsement of DeepMap’s unique vision, technology and people,” Nvidia’s automotive vice president and general manager, Ali Kani, said. “DeepMap is expected to extend our mapping products, help us scale worldwide map operations and expand our full self-driving expertise.”
Nvidia operates a self-driving segment that includes on-vehicle products such as its Drive hardware and software. It has partnered with Mercedes-Benz, Toyota, and other vehicle makers.
DeepMap makes high-definition mapping software that can scale across fleets of self-driving cars, and can function around the world, among other features. Nvidia said DeepMap uses crowdsourced data from vehicle sensors to build maps that are constantly updated as cars drive. DeepMap’s technology will help Nvidia produce accurate maps with centimeter-level precision. The company said such maps are a crucial part of operating autonomous vehicles in the world.
Sales of Nvidia auto products suffered in its last fiscal year, falling 23%, in part because of the Covid-19 pandemic. Automotive revenue is expected to rebound this year, and analysts estimate it will grow 25% to $668.8 million.
The company recently unveiled the next generation of its self-driving chip called Atlan, which is meant for auto makers’ 2025 models. In a May conference call, Chief Financial Officer Colette Kress said the company’s “automotive design win pipeline” now exceeds $8 billion through fiscal 2027.
DeepMap has raised $92 million, according to Crunchbase, and was founded in 2016 by James Wu and Mark Wheeler. The co-founders have worked for Alphabet’s (GOOGL) Google and Apple (AAPL), among other places, and the company is based in Palo Alto, Calif. Nvidia said it expects the acquisition to close in the third calendar quarter of this year.
Nvidia stock has climbed 36% this year, outpacing the PHLX Semiconductor index’s 14% gain. The benchmark S &P 500 index has risen 13% in 2021.
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