Volkswagen has selected London-based AI startup Wayve to supply the core software for its next generation of highly automated vehicles, edging out a field of competitors that included Nvidia Corp., according to multiple reports citing people familiar with the decision2,3,4.
No binding contract has been signed. Audi's procurement team is expected to negotiate the commercial terms. But the direction is set: Volkswagen intends to source higher-level driver-assistance software from Wayve rather than build it in-house or rely on Nvidia Corp.'s autonomous-driving stack.
How Wayve won the evaluation
The selection followed comparative testing in which Wayve, Nvidia Corp., and other candidates demonstrated their systems. Wayve reportedly scored well on both capability and cost.
One episode stood out. During a drive through London city traffic, an Audi A6 e-tron running Wayve software autonomously recognized that an oncoming driver was yielding by flashing headlights, then maneuvered into a parking space on its own. A Volkswagen "group decision-maker" described the moment to Der Spiegel.
Wayve's system relies on end-to-end deep learning that converts sensor data directly into driving decisions, operating without hard-coded behavioral rules or detailed 3D maps. The company says its software is fundamentally usable across vehicle models.
Wayve was founded in 2017 and has raised roughly $2.8 billion across several funding rounds. Its backers and development partners include Mercedes, Nissan, and Stellantis. Nvidia Corp. itself holds a stake in Wayve and is expected to continue supplying processors to Volkswagen regardless of the software outcome.
Cariad's narrowing role
The decision marks a break with Volkswagen's earlier software path. The joint development venture between Volkswagen's software subsidiary Cariad and supplier Bosch has ended. Existing shared software from that partnership will still see use, but for higher levels of automation Volkswagen is now turning to specialist partners.
Under the reported plan, Wayve would primarily provide the AI software while Cariad would handle integration with Volkswagen's vehicle systems. Cariad's autonomous-driving division employs about 1,200 people5. The subsidiary plans to shed 1,000 positions from a total workforce of more than 4,000, and its subsidiary Vaiva, with roughly 160 employees, is set to close.
Volkswagen expects Cariad to improve its operating result by about 400 million euros and reduce investment by roughly 6.1 billion euros over five years.
Broader turbulence at Volkswagen
The software pivot arrives amid a public leadership dispute over cost-cutting. Volkswagen announced the dismissal of ten collective agreements covering working hours and vacation. CEO Oliver Blume cited the need for salary reductions and an end to the 35-hour week. Works council chief Daniela Cavallo rejected Blume's account, saying the remarks further damaged already frayed trust.
ANALYSIS The Wayve selection splits the hardware and software layers of Volkswagen's autonomous-driving strategy: Nvidia Corp. chips may still sit under the hood even as Wayve's AI runs on top. That division keeps Volkswagen from depending on a single supplier for both compute and intelligence.
Volkswagen's share price is scraping the bottom of its 52-week range. The automaker plans to keep using the Level 2 driver-assistance system developed through the Cariad-Bosch relationship, including in the planned ID.EVERY1.