Major automakers like General Motors Co, Ford Motor Co and Volvo Cars deepened ties with key technology partners this week to gird for the fight against electric car challenger Tesla Inc and Apple Inc as it revs up to enter the market.
Three chip firms - Intel Corp's Mobileye, Qualcomm Inc and Nvidia Corp - have emerged from a raft of announcements at the Consumer Electronics Show in Las Vegas as the leaders in locking down the brains of self-driving cars for the next decade.
The deals involve consolidating scores of older, slower chips into more powerful centralised computers. But to win them, the chip firms have had to consent to letting automakers control key parts of the technology.
Reuters has previously reported that Apple plans an electric car. Bloomberg reported last year that the iPhone maker is aiming for full self-driving capabilities as early as 2025.
For automakers facing Apple and Tesla, the stakes are high. In addition to electrifying their models, automakers are essentially designing computers with increasing self-driving capabilities.
That means a big opportunity for automakers to make money off software and services in cars long after vehicles roll off a dealer's lot, but only if they can keep the customer relationships and data for themselves, the way that Tesla and Apple do.
Automakers "that haven't been the pioneers are finally realising they're going to be left in the dust if they don't change their approach," said Danny Shapiro, vice president, automotive for Nvidia, a maker of high-powered chips.
Nvidia this week announced deals to supply the electronic brains for future models from several Chinese electric vehicle startups, and is working with other automakers including Mercedes, Hyundai Motor Co, Volvo and Audi.
Control of technology and data are areas of tension between automakers and technology companies, Shapiro said. "Control and customisation, and who owns the data?"
The answer is complex because of the staggering amount of technology required to make cars drive themselves.
These include computer vision algorithms to help cameras recognise pedestrians, sprawling high-definition maps of the world's roads, and "drive policy" software to make millisecond decisions about how the car should behave when confronted with the unexpected.
For chipmakers, this means they need to have every aspect of the technology ready, but be willing to let customers pick and choose.
Qualcomm Inc, for example, spent $4.5 billion last year to purchase Veoneer Inc to round out all the pieces of software needed to complement its self-driving car chips. But after winning its first major self-driving chip contract with GM this week, those software assets will not be included because GM has its own.
"Our software stack is all internally developed. So we're not taking their pieces," said Jason Ditman, chief engineer for GM's forthcoming "Ultra Cruise" hands-free driving product.