AB Volvo is partnering with U.S. chip manufacturer, Nvidia to advance AI used in self-driving vehicles, according to a statement by both firms released on Tuesday.

The agreement between Volvo and Nvidia is a long-term alliance over several years, Reuters reports, and work will get underway immediately with staff from both companies being co-located in Gothenburg, Sweden and Santa Clara, California.

Volvo stated the partnership with Nvidia will focus on the development of a flexible autonomous driving system, which is hoped to be utilised in commercial pilot schemes before being used in commercial vehicles from the Volvo Group.

Martin Lundstedt, President and CEO of the Volvo Group stated: "Automation creates real-life benefits for both our customers and the society in terms of safety, energy efficiency and as a consequence productivity. We continue to gradually introduce automated applications in the entire spectrum of automation, from driver support systems to fully autonomous vehicles and machines. This partnership with NVIDIA is an important next step on that journey.”

Having previously launched technology agreements with other car manufacturers including Volkswagen, Mercedes-Benz and Toyota, Nvidia said it was “thrilled” to now be joining forces with Volvo.

Nvidia CEO Jensen Huang commented: “The latest breakthroughs in AI and robotics bring a new level of intelligence and automation to address the transportation challenges we face. We are thrilled to partner with Volvo Group to reinvent the future of trucking.”

Lars Stenqvist, Volvo Group Chief Technology Officer said: "Automation is a key technology area for the Volvo Group. With this partnership we will further increase our speed of development and strengthen our long-term capabilities and assets within automation, to the benefit of our customers in different segments and markets.”

Nvidia has been working on building its Drive Constellation chips into cars, although they only make up $641m of the company’s $11.7bn in revenue in its latest fiscal year.

Tesla was one of Nvidia’s major customers for automotive chips, but in 2018 CEO Elon Musk announced Tesla was developing its own chip.

The Reuters report goes on to say that the partnership between Volvo and Nvidia will be based on Nvidia’s full software package for sensor processing, perception, map localization and path planning.

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