Just when it looked like NVIDIA (NASDAQ:NVDA) was falling behind Intel (NASDAQ:INTC) in the self-driving car race, it announced a new autonomous driving platform that could swing the momentum in its favor once again. The graphics specialist's latest innovation brings fully autonomous, driverless cars a step closer to reality.

More importantly, it could potentially set the company on its way to make a big splash in one of the most lucrative applications for self-driving technology: ride-hailing. Let's take a look at what this latest product could do for NVIDIA, and the potential bumps in the road that it could face.

Introducing the DRIVE PX Pegasus

The DRIVE PX Pegasus -- the latest generation of NVIDIA's artificial-intelligence-enabled autonomous driving platform -- should help the company turn a new page in self-driving car development as it is 10 times more powerful than the existing DRIVE PX2 chip.

The NVIDIA DRIVE PX Pegasus.

Image Source: NVIDIA 

This makes the chip capable of powering Level 5 autonomy, which means that a vehicle equipped with the DRIVE PX Pegasus could drive completely on its own, removing the need for a steering wheel or pedals. NVIDIA has already decided a roadmap for this new chip, believing that it could be the key to developing autonomous taxis.

The good news is that this Pegasus has already gotten off the ground. NVIDIA has gotten 25 of its partners to start testing this new chip. Looking ahead, it won't be surprising if more companies join the team as NVIDIA has built a solid ecosystem of 225 partners who use DRIVE PX for self-driving car development.

More importantly, NVIDIA has a clear vision for the new chip. The company's ride-hailing service partners, such as NuTonomy and Optimus Ride, are already working on Level 5 self-driving taxis, and they believe that DRIVE PX Pegasus will accelerate their time to market. This sets the chipmaker on its way to attack a rapidly growing ride-hailing services market that's part of what some call the mobility-as-a-service market, or MaaS.

Goldman Sachs analysts forecast that the global ride-hailing industry will grow eight-fold by 2030, mainly driven by the deployment of autonomous fleets by participants such as Uber, Lyft, and others. More specifically, the daily average of ride-hailing trips could jump to 97 million in 2030 from just 15 million at present since autonomous fleet deployment would allow service providers to enhance efficiency and complete more trips.

NVIDIA could win big from this space provided its execution remains top-notch. But it won't have a free hand as rival chipmaker Intel has also trained its sights on the ride-hailing market.

NVIDIA will run into Intel's automotive alliance

Intel has rapidly brought its autonomous driving technology up to speed after lagging NVIDIA initially. In fact, Intel's chips are powering self-driving cars from Alphabet subsidiary Waymo.

This is a huge win for Chipzilla as Waymo has established a substantial lead in autonomous cars, giving Intel's self-driving technology a ringing endorsement that could help it attract automakers. But more importantly, Intel is now a part of Alphabet's ambition of targeting the ride-hailing market.

Recent reports indicate that Alphabet is set to launch an autonomous ride-hailing service once it irons out glitches. This means that Intel could have the early mover advantage in the ride-hailing space as it will be able to display the capability of its chips commercially, while NVIDIA's Pegasus platform is still under testing.

However, the ride-hailing industry is too big to be dominated by just one player. This is where NVIDIA's numerous partnerships could come into play, allowing it to carve a slice of this potentially big market that could boost its business in the long run.

 

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Nvidia. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.