VW Develops Bespoke AI Chip

Volkswagen is developing its own artificial intelligence chip to boost electric vehicle development and regain market share in China. The company has seen a decline in sales in China due to increased competition from domestic EV manufacturers. VW plans to launch 30 new EV models and aims to integrate AI into all aspects of its operations, from design to assembly. This includes a new AI-powered advanced driver-assistance system (ADAS) platform.

The new AI chip is part of a larger strategy to cut costs and streamline product development, with a goal of saving €4 billion by 2035. VW's software division Cariad is collaborating with Chinese tech firm Horizon Robotics to develop the AI platform. The company's sales plummeted by nearly 10% in 2024, making it harder for Western automakers to compete with Chinese companies like BYD and Geely.

VW is also exploring partnerships with companies like Xpeng to integrate their AI chips into VW models launching in China next year. Xpeng's Turing AI chip boasts significant computing power and is designed to support autonomous driving and AI large language models. VW's investment in AI is intended to speed up EV adoption and strengthen its competitive edge in the Chinese market.