NIO stock had surged on Monday when the Chinese EV manufacturer had expressed willingness to enter into a surprise partnership with AMD to expedite the automaker’s deep learning process. Well, NIO is apparently now suffering from a classic case of buyer’s remorse, with the company repudiating its partnership with AMD today. As a refresher, AMD had posted a video on Weibo to announce that NIO would use EPYC processors within its HPC (high-performance computing) platform in order to speed up the automaker’s deep AI learning process and reduce the product development cycle. Crucially, these chips were to be used only in NIO’s vehicle development process, with the company expected to continue to rely on Qualcomm chips for the EV cockpits as well as smart driving chips sourced from NVIDIA and Intel’s Mobileye. As an example of the collaboration that could have been expected, AMD had suggested in its video using high-performance FEA (Finite Element Analysis) and CFD (Computational Fluid Dynamics) simulation to perform crash simulation or wind resistance analysis, thereby improving the safety and efficiency of NIO’s EVs. Readers can view the entire video (dubbed in Chinese) here:
Bear in mind that AMD’s EPYC processors combine the microarchitecture of enhanced Zen 3 cores with up to 32 MB L3 cache per core, as well as a high clock frequency. By utilizing these chips, the NIO HPC apparently delivered a 50 percent year-on-year increase in the number of single-day simulation tasks, thereby accelerating AI deep learning training and helping the development of autonomous driving, AMD had said. This brings us to today when NIO’s senior director of corporate communications, Ma Lin, denied the partnership with AMD: The executive has also asked AMD to take down the video it posted on Weibo. In an apparent clarification, Lin also noted that NIO only procured servers that used AMD chips, thereby rejecting the hype around a broad-based partnership:
So, What Caused NIO’s Cold Feet?
This entire saga is quite suspicious, in our opinion. The video was posted by AMD on Monday, and if the underlying message was unfounded, NIO should have taken remedial action immediately instead of denouncing this partnership two days later. While the exact details are still murky, we would hazard a guess that NIO likely balked at some of the associated terms of the deal. With the global chip sector heading toward inevitable bifurcation, it is possible that NIO wanted to limit its vulnerability in case the chip flow toward China from the US-affiliated sources ceased entirely. Then again, this partnership was only concerned with speeding up NIO’s product development cycle – a non-critical component in the broader scheme of things. We are likely to uncover much more details about this saga in the days ahead. Meanwhile, NIO shares appear to be holding up quite well, all things considered. As an illustration, the stock is up over 3 percent in today’s pre-market trading.
Update: NIO and AMD Appear to be Calling a Truce
Now that AMD has deleted the video on Weibo that had spurred a strong reaction from NIO, the Chinese EV giant appears to be toning down its rhetoric. To wit, Ma Lin has now posted the following message on Weibo: Note: The wording of the introduction para has been altered slightly for additional clarity. “AMD is a very respectable company. No fight, no acquaintance. Let’s work together for the coming of car intelligence and the vision of Blue Sky Coming.”
