Detroit Moves to Silicon Valley as OEMs are Vying to Develop AI for Future Cars

Silicon Valley is the new Detroit. The race among automakers in pioneering future car—autonomous car—is bringing them to Silicon Valley away from Detroit—the City of Motorcars.

This global technology hub—Silicon Valley—is expected to extend all possible technological assistance to auto makers in the making of autonomous car especially, Artificial Intelligence (AI) in Autonomous Driving (AD).

Hence, more than 60 firms—tech firms and car manufacturers—have already set up shop in this part of Northern California and many more are expected to arrive in near future.

In past few years, the tech firms, auto manufacturers, ride-hailing firms, etc. have collectively invested nearly trillion dollars to develop AI for self-driving cars.

The aggressive involvement of tech giants like Google, Intel, etc. in the development of AI in AD is posing threat to legacy auto manufacturers such as Ford, Toyota, BMW, etc. It is because such tech giants have the expertise of software in comparison to Original Equipment Manufacturers (OEMs). And with the development of innovative technology (AI in AD), they are likely to capture the market of OEMs.

This is one of the key reasons due to which OEMs are investing heavily in tech start-ups or partnering with established tech giants particularly those that are located in Silicon Valley for the development of AI in AD.

Automakers/Ride-hailing Firms Investment/Partnership with AI Start-up
Ford It will be investing US $1 billion in the course of five years into AI start-up called Agro AI. It will be developing brains for Ford’s self-driving cars.
Volkswagen, Uber, etc. After partnering with Tesla and Baidu, Nvidia—global chipmaker—partnered with Volkswagen and Uber to develop AI for driverless cars.
Toyota Toyota has invested in seven different start-ups those are in early stage at present. With a budget of US $100 million, this Japan based automaker plans to develop AI for its self-driving cars through these start-ups.
Fiat Chrysler Automobiles (FCA) In order to develop autonomous driving platform, FCA announced to join BMW, Intel and Intel acquired Mobileye last year.

The extensive investment by OEMs is predicted to develop centralized AI by the end of 2025. This system will be capable of controlling different vehicle fleets through connected cars network and infrastructure.

BY 2025, their (OEMs) effort is expected to bring over 3.5 million vehicles on the road with Level 4 capability (vehicle with minimal intervention of driver whereas Level 5 does not require driver). This is estimated to garner around US $15 billion in revenue for them—OEMs.

For the wide adoption of Level 4 in real world, AI is becoming necessity as it also paves the way to Level 5. It (AI) will be offering tremendous advantages to OEMs while emerging as first fully autonomous vehicle of the word.

And in the course to develop future car—autonomous car, start-ups in Silicon Valley with advance software and hardware technology will play vital role in the development of AI for OEMs.

For more information on “Impact of Artificial Intelligence on Autonomous Driving Development” please visit

Subarna Poudel is a researcher with Frost & Sullivan. He can be reached at

Sapan Agarwal drives content and marketing for Frost & Sullivan. Sapan is based out of Kuala Lumpur Malaysia and can be reached at | +603 6204 5830

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