Finance

Deeproute claims ‘deep cooperation’ with Nvidia on driver assist

Published

4 months ago

November 5, 2024

A car with autonomous driving system by Alibaba-backed DeepRoute.ai, drives on a street in Shenzhen, Guangdong province, China July 27, 2022.

David Kirton | Reuters

BEIJING — Deeproute.ai, a Chinese startup developing autonomous driving systems, announced a $100 million funding round Tuesday from an undisclosed automaker, while emphasizing close ties with chipmaker Nvidia.

Pitchbook data showed Chinese company Great Wall Motor led the investment.

It’s been difficult to obtain financing, especially from a non-government source, Maxwell Zhou, CEO of DeepRoute.ai, told reporters Tuesday in Mandarin, translated by CNBC.

The startup is also in “deep cooperation” with Nvidia, Zhou said, noting “in-depth discussions” with the chipmaker’s CEO Jensen Huang.

Zhou spoke on “Commercializing mass-produced autonomous driving solutions” at Nvidia’s closely watched GTC AI conference in March.

Waymo will lead autonomous driving, not Tesla: Harvest's Paul Meeks

Shenzhen-based Deeproute said it uses Nvidia’s Orin chip for its current driver-assist system.

The startup added it is part of the first batch of companies in China to obtain Nvidia’s newer Thor chip for cars and will release a new system using it next year that can use more visual cues to manage more complex driving scenarios.

“Lots of companies in China are competing on autonomous driving. It is actually a competition over AI,” Zhou said.

In terms of AI computing power, Deeproute said it has its own capacity, and can tap Alibaba‘s if needed. The e-commerce and cloud computing company led a $300 million investment round in Deeproute in 2021, giving it a valuation of more than $1 billion just two years after it was founded in 2019, according to the startup.

The U.S. in October 2022 imposed sweeping restrictions on China’s ability to access the most advanced semiconductors from Nvidia and other American companies. Automotive chips don’t currently fall in that category.

Nvidia is scheduled to release earnings for the quarter ended Oct. 27 on Nov. 20. For the quarter ended July 28, the chipmaker said its automotive segment saw revenue rise by 37% year-on-year to $345 million.

Eyes on Japan

Deeproute currently works with Chinese automakers selling in China. The company expects at least three car models using its driver-assist system will hit the road this year.

Already, Deeproute’s systems are running in more than 20,000 cars on the road, Zhou said. He expects that number to increase, potentially by ten-fold, next year.

The startup, which has an office in California, said it is looking to work with foreign automakers and plans to participate in Japan’s auto show next year.

Tesla competition

Deeproute has focused on using artificial intelligence to automatically drive cars, without relying on “high-definition maps.” That allows a vehicle to use driver assist tech on roads where those technical parameters haven’t been created.

It’s a trend car tech companies such as Xpeng and Huawei are pursuing — and Tesla‘s strategy for developing autonomous driving. Elon Musk’s car company has focused on using cameras and artificial intelligence to steer the vehicle, without heavy reliance on HD maps.

Those maps, used by autonomous driving companies such as Alphabet‘s Waymo, give a car a detailed picture of city streets. But they need to be created before a car runs on the road, a process that can drive up costs.

Zhou said the company is very eager for Tesla’s driver-assist product — called “Full Self-Driving” — to enter China. His reasoning is that Tesla’s product will encourage more consumers to become more interested in driver-assist features — and boost Deeproute’s prominence in the sector.

When asked about IPO plans, Zhou said the startup would keep to its own development pace, but it welcomed the latest public offerings of other industry players.

Chinese autonomous driving software developer WeRide went public on the Nasdaq last month, while robotaxi operator Pony.ai has filed for a U.S. IPO.

Industry focus on driver-assist

Companies in China’s autos industry are increasingly looking at driver-assist tech as a way to stay competitive in the market.

Pony.ai announced Saturday an agreement to cooperate on mass-development of fully autonomous robotaxis with state-owned Beijing Automotive Group’s new energy vehicle subsidiary.

Tencent on Monday announced it extended its strategic cooperation with German autos supplier Bosch to work on autonomous driving and tech-enabled cockpits. The two companies first agreed to strategic cooperation in 2020.

Clarification: This story has been updated to reflect that Deeproute was part of the first batch of companies in China to obtain Nvidia’s new Thor chip for cars.

Finance

BRK, HOOD, NKE, PLTR and more

Published

1 hour ago

February 24, 2025

Business Finance News

Finance

Berkshire advances on surge in earnings, but questions linger about cash

Published

6 hours ago

February 24, 2025

Business Finance News

Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024.

David A. Grogen | CNBC

Berkshire Hathaway shares got a boost after Warren Buffett’s conglomerate reported a surge in operating earnings, but shareholders who were waiting for news of what will happen to its enormous pile of cash might be disappointed.

Class A shares of the Omaha-based parent of Geico and BNSF Railway rose 1.2% premarket Monday following Berkshire’s earnings report over the weekend. Berkshire’s operating profit — earnings from the company’s wholly owned businesses — skyrocketed 71% to $14.5 billion in the fourth quarter, aided by insurance underwriting, where profits jumped 302% from the year-earlier period, to $3.4 billion.

Berkshire’s investment gains from its portfolio holdings slowed sharply, however, in the fourth quarter, to $5.2 billion from $29.1 billion in the year-earlier period. Berkshire sold more equities than it bought for a ninth consecutive quarter in the three months of last year, bringing total sale of equities to more than $134 billion in 2024. Notably, the 94-year-old investor has been aggressively shrinking Berkshire’s two largest equity holdings — Apple and Bank of America.

As a result of the selling spree, Berkshire’s gigantic cash pile grew to another record of $334.2 billion, up from $325.2 billion at the end of the third quarter.

In Buffett’s annual letter, the “Oracle of Omaha” said that raising a record amount of cash didn’t reflect a dimming of his love for buying stocks and businesses.

“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett wrote. “That preference won’t change.”

He hinted that high valuations were the reason for sitting on his hands amid a raging bull market, saying “often, nothing looks compelling.” Buffett also endorsed the ability of Greg Abek, his chosen successor, to pick equity opportunities, even comparing him to the late Charlie Munger.

Meanwhile, Berkshire’s buyback halt is still in place as the conglomerate repurchased zero shares in the fourth quarter and in the first quarter of this year, through Feb. 10.

Some investors and analysts expressed impatience with the lack of action and continued to wait for an explanation, while others have faith that Buffett’s conservative stance will pave the way for big opportunities in the next downturn.

“Shareholders should take comfort in knowing that the firm continues to be managed to survive and emerge stronger from any economic or market downturn by being in a financial position to take advantage of opportunities during a crisis,” said Bill Stone, chief investment officer at Glenview Trust Company and a Berkshire shareholder.

Berkshire is coming off a strong year, when it rallied 25.5% in 2024, outperforming the S&P 500 — its best since 2021. The stock is up more than 5% so far in 2025.