This week at the CES technology trade show in Las Vegas, autonomous driving technology powered by cutting-edge large AI models appears to be taking center stage, with investors increasingly betting that artificial intelligence will revitalize a traditional manufacturing industry long plagued by slow core technology iteration, high investment costs, safety incidents, and regulatory scrutiny. Just as traditional automakers are hitting the brakes on their full-scale electric vehicle (EV) transition plans due to intense competition and significant cuts in government low-carbon subsidies, searching for the next profit engine, a multitude of automotive supply chain companies and tech startups are queuing up to showcase their latest autonomous driving hardware and software platforms. With NVIDIA CEO Jensen Huang's keynote address at the CES opening event, where he unveiled NVIDIA's latest roadmap for data center AI computing infrastructure, autonomous driving, and humanoid robotics, CES 2026 has officially commenced. A series of partnerships and deals are expected to be announced at the event, with commitments to shift significant driving responsibilities away from human drivers or plans to eliminate the need for them entirely.
"This year you will see an increasing focus within the automotive manufacturing industry on physical AI and autonomous driving," stated C.J. Finn, US Automotive Leader at PwC, adding that there will be close scrutiny on how companies leverage AI to tackle the challenges of safely deploying fully driverless cars. "I do believe this connectivity around autonomous driving technology will become a core focus." However, the most advanced AI technology is expected to be embedded into a wide range of everyday products beyond just cars—potentially encompassing everything from robots and wearables to home appliances and health tech. Leading figures from the US chip industry, including NVIDIA (NVDA.US) CEO Jensen Huang and AMD (AMD.US) CEO Lisa Su, are among the featured keynote speakers at this year's CES.
CES 2026, one of the largest annual tech expos in the US, runs from January 6th to 9th. Officially known as the Consumer Electronics Show, it is traditionally famous for launching the latest consumer electronics like TVs, laptops, and wearables, but in recent years it has become a key venue for chip giants like NVIDIA, AMD, and Qualcomm to unveil high-performance AI computing infrastructure for enterprise data centers, and for automakers to debut new EVs. However, the Trump administration's significant cuts to EV-friendly incentives and policies, coupled with persistent high inflation and interest rates, have dramatically cooled EV demand in the US and globally. Intensifying competition in the global EV sector has further forced many traditional automakers to abandon plans for new EV models and rethink their future strategies.
This dramatic shift in automotive manufacturing will be evident at this year's CES. Most traditional automakers have no plans to unveil new or upgraded electric vehicles—a stark contrast to previous years—instead pivoting fully towards developing fully driverless autonomous vehicles (similar to Tesla's Robotaxi) and advanced autonomous driving technology.
First and foremost, the full-scale commercialization of autonomous vehicles is no easy feat. High investment, regulatory hurdles, and lengthy investigations following collisions have forced many small and mid-sized companies to shutter their self-driving operations. Yet, the small-scale deployment of fully driverless taxi services (Robotaxi) with safety monitors by Tesla (TSLA.US), the leader in EVs, robotics, and autonomous driving, in Austin, Texas last year, along with the faster expansion of Alphabet's (GOOGL.US) Waymo, has undoubtedly injected new vitality into the global autonomous driving industry. NVIDIA's major announcement of the open-source Alpamayo family of autonomous driving AI models at the CES opening event on January 6th has further concentrated investor focus on this sector for the CES 2026.
It is understood that NVIDIA CEO Jensen Huang introduced the open-source Alpamayo family of autonomous driving AI models at CES 2026, hailing it as the "world's first autonomous vehicle AI model capable of thinking and efficient reasoning," directly challenging Tesla's unique Full Self-Driving (FSD) system. NVIDIA described Alpamayo as the "ChatGPT moment for physical AI." The flagship model, Alpamayo 1, is a Vision-Language-Action (VLA) model with 10 billion parameters. Unlike traditional systems that merely detect objects and plan paths, Alpamayo employs a breakthrough "chain-of-thought AI reasoning" approach, processing video input to generate driving trajectories and, crucially, also outputting the logic behind its decisions. Huang stated, "This is not just a driving model; it's a model that can explain its thought process."
In addition to the Alpamayo family (open-source reasoning VLA models), NVIDIA also launched the latest AlpaSim simulation tool and Physical AI Open Datasets. Officially, these are combined with Alpamayo to form a complete development cycle of "model + simulation + data," aimed at enhancing the safety and verifiability of fully autonomous driving technology. For NVIDIA, the open-source strategy focuses on ecosystem entry, while monetization centers on computing power and enterprise-level delivery. For instance, open models and toolchains significantly lower development barriers, encouraging more automakers and robotics companies to align their R&D and mass production with NVIDIA's proprietary computing platforms, thereby driving demand for data center AI compute racks, vehicle-side compute platforms (DRIVE), and robotics edge computing platforms (Jetson).
Concurrently at CES, NVIDIA heavily promoted its "Rubin Six-Chips-in-One" rack-level AI computing infrastructure platform, emphasizing a drastic reduction in token costs, essentially using platform-based compute supply to handle the massive new AI training/inference workloads brought by the "Physical AI" wave. Beyond the focus on fully driverless technology at CES 2026, driver-assistance systems for personal vehicles have also seen improvements, with some automakers concentrating on providing hands-free driving and automatic lane-changing capabilities on highways. Some companies, like US-based EV maker Rivian (RIVN.US), aim to introduce "eyes-off" assisted driving features and achieve full self-driving capabilities on city streets similar to Tesla's FSD.
After swallowing billions in write-downs related to EV strategy shifts, automakers—particularly traditional ones like Ford and General Motors—have become more strategic and inclined to adjust their capital investments. They are also actively managing the negative impacts of higher tariffs imposed by US President Donald Trump on imports of complete vehicles and auto parts. Notably, many domestic US traditional automakers are choosing to absorb most of the tariff costs rather than passing them fully onto consumers, thereby increasing pressure on profit margins.
According to Felix Stellmaszek, Global Leader of the Automotive & Mobility practice at Boston Consulting Group, alongside the increased focus on autonomous driving by automakers and investors, these cost concerns, together with growing competitive pressure from large Asian automakers, will be a key focus at CES. "One of the main discussion topics we actually expect to see frequently at CES will be around costs and broader cost competitiveness for automakers," Stellmaszek said.
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