Key Takeaways
- At GTC, Nvidia’s Jensen Huang forecasted AI infrastructure spending to hit $1 trillion from 2025 through 2027
- Uber will deploy robo-taxis powered by Nvidia DRIVE technology in 28 markets worldwide before 2028, competing directly with Tesla’s robotaxi vision
- Major automakers including BYD, Hyundai, and Nissan committed to integrating Nvidia’s DRIVE platform for autonomous vehicle development
- Wall Street analysts at Morgan Stanley estimate Tesla’s autonomous technology is worth approximately $270 per share, totaling $1.2 trillion — contingent on maintaining competitive differentiation
- Elon Musk revealed Tesla’s “Terafab Project” will debut within seven days, suggesting an expansion into AI hardware infrastructure
For years, Tesla’s stock price has commanded a significant premium based on expectations surrounding its artificial intelligence capabilities and autonomous vehicle technology. However, Monday’s Nvidia GTC conference raised critical questions for shareholders: what becomes of that valuation premium when self-driving technology becomes widely accessible?
Jensen Huang, Nvidia’s chief executive, outlined projections for $1 trillion in AI infrastructure spending spanning 2025 to 2027. The announcement carrying the most weight for Tesla investors centered on Nvidia’s DRIVE platform — an integrated solution enabling any vehicle to function as an autonomous taxi through the DRIVE AGX Thor computing system combined with camera arrays and lidar technology.
Uber revealed plans to deploy DRIVE-powered autonomous taxis throughout 28 international markets by 2028. This represents a significant opportunity that might have belonged to Tesla, which is currently developing its Cybercab vehicle and constructing its own autonomous transportation network.
The partnerships extended beyond Uber. BYD, Hyundai, and Nissan each announced commitments to integrate DRIVE technology into their autonomous vehicle initiatives. Every additional collaboration expands Nvidia’s presence in a sector Tesla has been positioning as central to its future revenue streams.
Tesla’s electric vehicle deliveries have declined year-over-year for two straight years across both American and Chinese markets. Despite this, shares have surged 141% over the previous 24 months, powered primarily by investor enthusiasm around robotaxis and AI capabilities rather than conventional automotive sales performance.
Analysts at Morgan Stanley attribute $270 per share of Tesla’s value solely to its autonomous driving technology — translating to roughly $1.2 trillion when calculated against its 4.5 billion fully diluted share count. This valuation assumes Tesla’s self-driving solutions maintain sufficient differentiation to support premium pricing power.
Commoditization of Autonomous Driving Could Reshape Valuations
Should DRIVE emerge as the standard autonomous platform across the automotive industry, self-driving transitions from competitive advantage to standard equipment. While fleet operators and end users would still pay for the functionality, profit margins likely wouldn’t support trillion-dollar market capitalizations.
Musk has dismissed these concerns publicly. In early 2026, he stated he’s “not losing any sleep” regarding Nvidia’s autonomous technology and expressed that he “genuinely hopes Nvidia succeeds.” Whether this reflects genuine confidence or strategic positioning remains unclear, leaving shareholders to conduct their own analysis.
From a hardware perspective, Tesla represents a significant customer for Nvidia’s products. The company’s AI engineering teams rely on extensive GPU infrastructure to train the neural networks powering Full Self-Driving functionality and robotics initiatives. This positions Tesla among Nvidia’s most rapidly expanding compute purchasers.
Terafab Project Indicates Tesla’s Strategic Pivot
Yet Musk’s recent X platform announcement regarding the “Terafab Project” launching imminently suggests Tesla aims to expand beyond simply consuming AI infrastructure — toward developing proprietary hardware solutions. Tesla has already developed custom vehicle processors and the Dojo training architecture.
This approach parallels strategies employed by Alphabet and Amazon — both companies engineered custom AI processors to decrease reliance on external suppliers like Nvidia.
Tesla shares declined 0.1% during premarket trading Tuesday, reaching $395. Nvidia advanced 0.3% to $183.76. Uber stock jumped 2.6% to $76.60 following the DRIVE partnership disclosure.
