Rivian unveils AI chip for automated driving, ditches Nvidia

(Bloomberg/Ed Ludlow) — Rivian Automotive Inc. has developed its own artificial intelligence chip, replacing Nvidia Corp. technology as part of a broader push to add and enhance automated-driving features in future vehicles.

The automaker will equip its upcoming R2 sport utility vehicles with Rivian Autonomy Processor 1 chips and a new lidar sensor. Taiwan Semiconductor Manufacturing Co. will produce the chips that, combined with the new sensor and AI model developments, will bolster Rivian’s efforts to eventually offer autonomous driving capability.

“This is not a bet one takes lightly, this is a huge commitment that’s taken us years,” Rivian Chief Executive Officer RJ Scaringe said in an interview. “Usually, you can’t lower cost and improve performance. But here, we improved performance dramatically and simultaneously lowered cost by hundreds of dollars per vehicle.”

Rivian shares were down 3.7% as of 12:35 p.m. in New York, paring an earlier decline of as much as 7%.

Two RAP1 chips will power Rivian’s next-generation on-board computer, called Autonomy Compute Module 3, which will process 5 billion pixels per second and deliver four times the performance of the Nvidia-powered system in Rivian’s current vehicles. The company’s SUVs and pickups offer driver-assistance features that require constant supervision.

Automakers have for years competed to develop more capable automated-driving systems and sold investors on a future where vehicles are eventually able to offer full autonomy. However, most manufacturers have tended to count on specialist chipmakers like Nvidia, Mobileye Global Inc. or Qualcomm Inc., because developing custom AI silicon is challenging and expensive.

Nvidia — now the world’s most valuable company — dominates the market for chips in data centers used to train AI models. Its business offering automotive chips remains small, accounting for only about 1% of sales, but the company is looking to increase that share.

Tesla Inc. has been an exception to the outsourcing trend, designing its own in-car chips and making them standard hardware to help justify the investment. The Elon Musk-led company has also taken a camera-only approach, arguing that it more closely aligns with how humans drive, and that added sensors like lidar are too costly.

Rivian disagrees, taking the side of many robotaxi and car companies that emphasize lidar’s ability to keep tabs on a vehicle’s surroundings and back up other sensors.

“Lidar has changed a lot,” Scaringe said. “It’s no longer a big expense, it’s a very small percentage of the vehicle’s bill of materials.”

Rivian’s R2 will enter production in the first half of 2026, with deliveries beginning shortly thereafter. The initial vehicles won’t have the new chip or lidar and will therefore have more limited automated-driving capabilities.

From 2027, Rivian will gradually introduce iterations of software that enable its vehicles to travel point-to-point without drivers needing to keep their hands on the wheel or eyes on the road.

Initially, that will be limited to highways before extending to other types of roads. Rivian’s ultimate goal is to sell customers and investors on a higher-margin software business, where personal vehicles are capable of operating autonomously without anyone in the driver’s seat.

Rivian went public in 2021 in one of the biggest-ever US listings. It was initially hailed as a rival to Tesla after beating major automakers to market with full-size electric pickups and SUVs. Since then, however, the company has struggled with the basics — its lone assembly plant in Illinois is expected to produce fewer than 50,000 vehicles this year, a fraction of the facility’s total capacity.

With Rivian continuing to burn cash, the company has repeatedly cut jobs and its stock is down more than 80% from highs reached shortly after the IPO. Even so, Volkswagen AG has committed almost $6 billion to a joint venture leveraging Rivian’s expertise in software and electronics, and the company continues to hire top talent from Tesla, Apple Inc. and Silicon Valley.

Hands-Free

At the core of Rivian’s current vehicles and the upcoming R2 SUV is a foundation called Large Driving Model. Its ability to learn from past and future driving will enable Rivian to upgrade the automated-driving capability of older R1 vehicles — which lack lidar and use Nvidia’s Orin chips — ahead of the introduction of the more complete R2 platform expected in 2027.

The company will start charging for its Autonomy+ software platform, starting with existing R1 owners, early next year. Customers can either pay $2,500 up front to access new features over the life of the vehicle, or a $49.99 monthly subscription.

The first iteration of the platform’s new capabilities will be modest and well short of what Tesla already offers through what it markets as Full Self-Driving, or FSD.

Rivian will release an expanded version of what it calls Universal Hands Free in the coming weeks to existing owners, allowing for hands-free assisted driving across 3.5 million miles of roads, up from roughly 135,000 miles currently. But it can’t navigate or react to many traffic situations.

An updated point-to-point version of the software is expected to be ready next year, where the vehicle will be able to navigate, make turns and change lanes, while still requiring eyes on the road.

Tesla offers FSD either via a one-time $8,000 charge, or a $99-a-month subscription. The latest generation handles many everyday driving tasks, from point-to-point navigation to lane changes without hands on the wheel. The system still requires active supervision and thus is not autonomous.

While Rivian’s own cars are still far from driving themselves, Scaringe says he’s open to licensing the technology to other automakers, including Volkswagen.

“What we are building is so well architected at a platform level,” Scaringe said. “It’s not hard for us to imagine in the next several years that this becomes a platform we also license.”

(Updates Rivian shares in fourth paragraph and adds additional details starting in the final paragraph.)

More stories like this are available on bloomberg.com

©2025 Bloomberg L.P.