Uber's stock powers higher as Nvidia robotaxi deal helps avert 'doomsday' scenario

By William Gavin

Uber and Nvidia aim to launch autonomous ride-hailing in up to 28 cities by 2028

Uber CEO Dara Khosrowshahi has said that Uber sees autonomous vehicles as a multitrillion-dollar opportunity.

Uber Technologies' latest move to capitalize on the nascent but fast-growing robotaxi market may help it avoid what analysts have labeled a "doomsday scenario."

Uber (UBER) said Monday that it would team up with a slew of autonomous-vehicle partners and Nvidia (NVDA) to launch robotaxi services in 28 cities around the world by 2028. Rival ride-hailing operator Lyft (LYFT) also notched a deal with Nvidia to use its DRIVE Hyperion AV development platform and other artificial-intelligence technology.

Competition in the robotaxi race has accelerated in recent years, with Alphabet's (GOOGL) (GOOG) Waymo the current leader in the U.S. market. Uber, Tesla (TSLA) and several other players are trying to change that.

"The 'ChatGPT moment' for physical AI has arrived," Nvidia CEO Jensen Huang said in a statement, referring to the OpenAI chatbot that sparked the AI boom.

Uber shares gained about 4% on Tuesday, while Lyft stock rose 3.6%. Shares of Uber and Lyft have dropped 4% and 27%, respectively, since Jan 1.

Uber has major AV aspirations but it doesn't plan to develop its own technology, which would likely be costly. That's why it's teamed up with at least two dozen companies to launch robotaxi services in at least 15 cities by the end of the year. Most recently, it added Amazon's (AMZN) Zoox AV firm to its roster of partners.

Uber CEO Dara Khosrowshahi said last month that Uber is convinced AVs will "unlock a multitrillion-dollar opportunity" for his company. In a statement on Monday, he said the deal with Nvidia lays the foundation for an "increasingly multiplayer AV world."

See: Here's how Amazon just stepped up its robotaxi competition with Tesla and Google

Nvidia and Uber's partners will use Nvidia's tech stack, including the Hyperion platform and the Alpamayo reasoning model. The companies' first targets are San Francisco and Los Angeles, where they aim to be operating by mid-2027.

The rollout will begin with data-collection vehicles before moving to supervised launches and later driverless operations. That approach, the companies said, should support a launch in up to 28 cities across four continents by 2028.

Several companies on Monday said they would adopt Nvidia's Hyperion platform, including China's BYD (BYDDY) (HK:1211) (CN:002594) and Japan's Nissan Motor (NSANY) (JP:7201). Hyundai Motor (KR:005380) also expanded its relationship with Nvidia and its robotaxi startup, which works with Uber in Las Vegas, will team up with Nvidia to develop AV tech.

Rising adoption of Nvidia's technology could give Uber access to a growing number of vehicles capable of autonomous driving, according to Deutsche Bank's Benjamin Black. That could also lower the chances of a "doomsday scenario" in which a single company is able to dominate the market, the analyst said in a note to clients on Tuesday.

BofA analyst Justin Post seemed to take a similar view. In a note to clients on Monday, Post said that if more companies produce affordable AVs, Uber may have an easier time buying and leasing robotaxis. The trend could also lift Uber's stock multiple, he added.

See: Why Uber's cheap stock is worth a fresh look despite the company's spending spree

-William Gavin

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03-17-26 1835ET