Nvidia boss Jensen Huang on Monday announced Alpamayo, a tech platform the company says will help self-driving cars think like humans.

Alpamayo brings reasoning to autonomous vehicles, allowing them to think through rare scenarios, drive safely in complex environments, and explain their driving decisions, Huang said on stage at the annual CES technology conference in Las Vegas.

Huang also mentioned that Nvidia has begun producing a driverless car powered by its technology, the Mercedes-Benz CLA, in partnership with the German automaker. The vehicle will be released in the US in the coming months before being rolled out in Europe and Asia.

Wearing his trademark black leather jacket, Huang told an audience of hundreds that the project has taught Nvidia an enormous amount about how to assist partners in building robotic systems.

Analysts suggest the announcement reinforces Nvidia's leadership in integrating AI hardware and software, deepening its push into physical AI. Paolo Pescatore, an analyst at PP Foresight, commented, NVIDIA's pivot toward AI at scale and AI systems as differentiators will help keep it way ahead of rivals.

Furthermore, Alpamayo represents a pivotal moment for NVIDIA; transitioning from being primarily a compute provider to a platform provider for physical AI ecosystems. Following Huang's presentation, shares of the AI chip designer saw a slight uptick in after-hours trading.

The presentation featured a video demonstration of the AI-powered Mercedes-Benz driving through San Francisco, showcasing its autonomy as a passenger kept their hands in their lap. Huang noted, It drives so naturally because it learned directly from human demonstrators, emphasizing its ability to predict and reason about driving decisions.

Alpamayo is open-source, with the underlying code available on the machine learning platform Hugging Face for autonomous vehicle researchers to access and retrain for free. Huang envisions a future where every vehicle, from cars to trucks, will operate autonomously.

Despite this ambitious view, its launch might pose competitive challenges to companies like Tesla, which offers its own driver assistance software called Autopilot. Following the announcement, Elon Musk commented, citing challenges in achieving complete autonomy.

Nvidia is currently the world's most valuable publicly traded company, with a market cap exceeding $4.5 trillion, though recent concerns about whether AI demand is overhyped have raised some questions about its growth trajectory.

The company also unveiled plans for its Rubin AI chips, which are due for release later this year, boasting the ability to perform computations using less energy than its current AI chips, potentially lowering the cost of developing similar technologies.