Automakers are entering a phase where the rapid increase in AI investment seen today will begin to slow sharply. Gartner report says that by 2029, only about five percent of automotive companies will continue expanding AI spending at the current pace, compared to more than 95 percent today. The decline will be driven by a combination of unrealistic expectations, weak digital foundations, skill gaps, and shifting operational priorities.
Many automakers are currently caught in what Gartner calls an AI euphoria. Companies are setting out to achieve disruptive results even though most lack the software and data maturity required to support advanced AI at scale. As these ambitious plans fail to deliver the expected value, enthusiasm will cool and budgets will tighten.
Weak software infrastructure is a key barrier. AI depends on high quality data pipelines, scalable cloud platforms, robust cybersecurity, and modern development practices. Automakers that have not invested heavily in these areas will struggle to make AI projects reliable or commercially viable. As a result, they are more likely to scale back or abandon ambitious AI programs.
Leadership preparedness is another dividing line. Automakers led by executives with strong technology backgrounds are more likely to maintain long term AI strategies. Traditional automotive leadership often prioritizes mechanical engineering and manufacturing efficiency over digital transformation. When early AI projects fail to meet expectations, such leaders will shift focus back to proven operational areas rather than doubling down on software driven innovation.
Cost pressures will also force companies to reassess AI spending. The industry is dealing with rising expenses related to electric vehicle development, battery supply chains, regulatory compliance, and factory modernization. AI initiatives that cannot show fast or measurable returns will be among the first to face budget cuts.
The competitive divide will widen. A small group of companies with strong software capabilities, data maturity, and long term AI strategies will continue pushing forward and capture the benefits of automation and intelligent systems. Most others will slow their AI efforts significantly, creating a gap between digital leaders and traditional manufacturers.
Even as AI investment slows, some areas will continue moving forward. Gartner expects at least one automaker to achieve fully automated vehicle assembly by 2030 due to rapid adoption of robotics. These automation gains will support efficiency, but companies that lack broader AI capabilities will still cut back on large scale AI programs outside the factory.
Throughout 2025, major partnerships and innovations have been announced, signaling a transformational shift toward AI-powered mobility solutions, smart manufacturing, and autonomous driving.
Hyundai Motor Group and NVIDIA Forge Strategic AI Partnership
In January 2025, Hyundai Motor Group teamed up with NVIDIA in a landmark partnership aimed at accelerating AI integration across a broad range of mobility sectors. This collaboration targets the development of AI-infused vehicles, robotics, next-gen smart factories, and software-defined automobiles, harnessing NVIDIA’s GPU and AI computing prowess to redefine future mobility. The partnership signals Hyundai’s push to lead the AI-powered transportation era through deep technological innovation.
General Motors Embeds NVIDIA AI for Autonomous Vehicles and Factory Automation
GM’s March 2025 announcement revealed plans to deploy NVIDIA’s AI chips and software frameworks to advance its autonomous vehicle (AV) development and factory automation efforts. Utilizing NVIDIA DRIVE AGX platforms, GM intends to enhance driver assistance systems (ADAS) and AI model training for smarter manufacturing processes. This deployment highlights how OEMs are leveraging high-performance AI hardware to accelerate AV commercialization and factory intelligence.
Helm.ai and Honda Pioneer AI Vision for Self-Driving Cars
In mid-2025, Helm.ai, a startup backed by Honda, unveiled “Helm.ai Vision,” an AI-powered camera perception system targeting Level 2+ and Level 3 autonomous driving. Honda announced plans to integrate this technology into its upcoming “Zero series” electric vehicles in 2026. Building on this, by August and October 2025, Honda and Helm.ai entered a multi-year joint development agreement and expanded Honda’s financial investment to expedite next-generation ADAS and end-to-end autonomous driving systems.
Hyundai and NVIDIA Amplify AI Infrastructure with Blackwell-Powered “AI Factory”
October saw Hyundai and NVIDIA deepen their collaboration, announcing the launch of a massive AI Factory powered by NVIDIA’s Blackwell GPU architecture. This facility will support the deployment of autonomous driving, smart factory operations, robotics, and in-vehicle AI systems with plans to utilize approximately 50,000 GPUs, exemplifying large-scale AI infrastructure investment in mobility.
Stellantis, NVIDIA, Uber, and Foxconn Collaborate on Global Robotaxi Development
At the end of October, Stellantis revealed a major joint venture with NVIDIA, Uber, and Foxconn to develop Level 4 autonomous robotaxis globally. The partnership leverages Stellantis’ AV-ready vehicle platforms, NVIDIA’s DRIVE AV software stack, Uber’s ride-hailing expertise, and Foxconn’s electronics manufacturing capabilities to fast-track commercial autonomous ride-hailing services worldwide.
NVIDIA and Uber Propel Autonomous Mobility Ecosystem with DRIVE AGX Hyperion 10
Alongside the Stellantis collaboration, NVIDIA announced its DRIVE AGX Hyperion 10 architecture and DRIVE AV software designed to enable Level 4 autonomous driving readiness. Uber plans to scale this technology as the backbone of an expansive global autonomous mobility network, driving ecosystem-wide adoption of self-driving vehicles.
The latest Gartner report indicates an impending consolidation phase in the global auto industry. This trend underscores the critical need for strategic partnerships and focused investments to succeed in the competitive AI mobility landscape.
Rajani Baburajan
