Nvidia (NVDA)  announced a new artificial intelligence platform for self-driving cars on Tuesday that will help put fleets of robotaxis on the road. The company said that the new system, dubbed Pegasus, is ten times faster than its current self-driving car platform and will support fully-autonomous driving.

Shares of Nvidia Corp. gained 2.3% to $189.69 on Tuesday morning.

Current self-driving car technology is difficult to deploy in mass-produced vehicles, the company explained in a statement. "Today, their trunks resemble small data centers, loaded with racks of computers with server-class NVIDIA GPUs running deep learning, computer vision and parallel computing algorithms," Nvidia said.

"It's very positive obviously for the company in terms of their steps in self-driving cars and extends their lead against the competition," said Betsy Van Hees of Loop Capital Markets about the announcement. 

While Intel Corp. (INTC)  advanced its self-driving car technology with the $15.3 billion purchase of Mobileye this year, Van Hees added, Nvidia remains the leader. PC gaming graphic processing units  are still a bigger near-term driver, she said, but automotive systems provide a long-term opportunity for Nvidia.  

In addition to making self-driving car platforms faster and more practical to deploy, Nvdidia founder and CEO Jensen Huang said that the Pegasus' AI platform will help open up new models and applications for ride-sharing. Customers will be able to order vehicles that resemble "offices, living rooms or hotel rooms on wheels" that will be amenable to the elderly and disabled.

While Nvidia said that more than 25 companies are using graphics processor units to build robotaxis, the company did not say when consumers might be able to hail one of the futuristic vehicles. Pegasus will be available to its partners in the second half of 2018, but a spokesman said Nvidia cannot say when its collaborators would deploy self-driving taxis.

"Robotaxis are a key early autonomous driving potential market, and Nvidia's Pegasus offering is a key component of a broader [autonomous vehicle] solution," 451 Research analyst Christian Renaud said. 

Other developments show the progress being made in bringing self-driving cars and robotaxis to market, Reanaud added. General Motors Co.  (GM) said Monday that it is buying light detection and ranging, or LiDAR, navigation technology developer Strobe Inc. to advance its Cruise self-driving car outfit. The Self Drive Act , which is working through the U.S. Congress, and similar regulations in Germany would provide a regulatory framework once mass-market self-driving cars and taxis are ready for the roads. 

Nvidia is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells NVDA? Learn more now.

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