Volkswagen Taps Wayve for Autonomous Driving Software, Beating Nvidia in Internal Shakeout

Volkswagen has settled on Wayve as its new autonomous driving technology partner following an internal bake-off, according to German media reports citing three people familiar with the matter. The British AI startup is said to have outperformed Nvidia and other contenders during testing conducted in a major southern German city in recent weeks, impressing Volkswagen on both technical and cost grounds. Neither Volkswagen, its software unit Cariad, nor Wayve would confirm the arrangement publicly.

The move carries real urgency for the group. Advanced driver assistance has become a key battleground in the premium segment, where Audi is seen as lagging Mercedes and BMW in automated driving features. Wayve follows an end-to-end philosophy similar to Tesla’s FSD approach, letting AI derive driving decisions directly from large volumes of sensor data instead of leaning chiefly on pre-programmed rules. During one trial, an Audi A6 e-tron running Wayve’s software reportedly read an oncoming driver’s headlight flash as a signal of yielded right of way and then steered itself into a parking spot.

Under the proposed split of duties, Wayve would supply the core AI software, while Cariad handles integration into Volkswagen’s existing stack of sensors, computing hardware and other software. Nvidia’s pitch was apparently different: a full turnkey system that could have rendered much of Cariad’s roughly 1,200-strong autonomous driving team surplus. The chipmaker is not necessarily sidelined, however — it holds a stake in Wayve and provides computing hardware for the startup’s projects, leaving Volkswagen’s eventual hardware choice still open. A final contract has yet to be signed, with Audi’s procurement department expected to lead negotiations.

The partnership could also reshape Volkswagen’s robotaxi ambitions. The group has long sought an outside investor for MOIA without success, and there have been discussions about bringing in a technology partner such as Wayve or Nvidia at both Cariad and MOIA to align passenger car assistance systems more closely with Level 4 robotaxi work. Meanwhile, Cariad is pressing ahead with cuts: it aims to lift its operating result by €400 million and trim investments by roughly €6.1 billion over five years, with CEO Peter Bosch announcing plans to shed around 1,000 of its current 4,000-plus positions. Volkswagen is also developing its next generation of software-defined EVs together with Rivian, while Cariad narrows its focus to areas including infotainment and autonomous driving.