Rivian AI models power move turns maker into tech supplier

Rivian now makes far more of its own technology than it did a couple of years ago. It has trained its own AI models to run the Rivian Assistant, the voice helper inside its vehicles. An over-the-air update in October connected that assistant to Gmail, a sign that the car’s assistant is turning into a platform that can plug into outside services.

It is also building an end-to-end automated driving system, meaning one piece of software that handles everything from reading the road to steering, for its own passenger vehicles and for future robotaxis. To run that software, Rivian is designing its own processor, a 5 nm chip developed with chip designer Arm and chipmaker TSMC. Owning the chip gives Rivian more say over how fast the car can think and how much power that takes.

In October, Rivian also bought Third Dimension AI, a company whose tools help with closed-loop simulation. That is a way of testing driving software in a virtual world that reacts to what the car does, before it ever reaches a real street. The company says it will share more at an Autonomy and AI Day on December 9.

The $5.8 billion joint technology venture with Volkswagen Group is where most of the money comes from today. It focuses on electrical architecture (the wiring and computer layout that ties a car together) and software. Volkswagen brands plan to use the Rivian-developed zonal architecture starting in 2027.

In the third quarter, Rivian’s software and services revenue rose 45 percent to $605 million, roughly 28 percent of the company’s $2.155 billion total. Of that, $354 million came from the Volkswagen venture. The unit turned a $256 million gross profit at a 42 percent margin, while the automotive side lost $80 million.

There is a catch. Most of those software profits come from engineering work for one partner, not from drivers paying for features. Scaringe has said he wants to grow the Volkswagen venture to cover AI and autonomy too, which would deepen that link. The subscription money from Rivian owners is the part that could make the business less dependent on a single customer.

Uber has agreed to invest up to $1.25 billion in Rivian through 2031, paid in stages as Rivian hits self-driving milestones. That started with $300 million. Scaringe said on October 29 that Rivian was “very confident” it would reach the next milestone before the end of 2026, which would release another $250 million. He did not say what the technical test is.

The two companies are aiming to launch driverless R2 robotaxis on Uber’s network in 2028, starting in a couple of cities and spreading to about 25 markets over roughly 18 months. San Francisco and Miami were named in the original plan as early locations. The fleet program starts with 10,000 vehicles, with an option for Uber or its partners to buy up to 40,000 more R2s from 2030.

That date is a target, not a promise. A car that can drive itself with a person watching is a long way from one that can carry paying passengers with nobody behind the wheel. Busy junctions, roadworks, cyclists and emergency vehicles all have to be handled reliably first.

For Rivian owners, the near-term change is a feature called Point to Point. You type in an address and the car drives the whole route, through city streets, intersections and highways, while you supervise and stay ready to take over. It builds on Autonomy+, the hands-free package that comes with all R2s and with 2025 and newer R1 models.

Point to Point is going to Rivian employees and invite-only early testers first, with a general release to Autonomy+ subscribers in 2027. Scaringe told analysts he already uses it on his daily commute and that take-up of Autonomy+ has beaten the company’s expectations, though he would not give a number.

For shoppers, the R2 is the other half of the story. It became Rivian’s best-selling model by volume in its first full quarter of production, and cheaper versions starting around $45,000 are expected next year, according to a Reuters report. Some R2 trims will carry two processors and lidar, a laser sensor that maps the surroundings, which adds cost.

And if licensing takes off, buyers of other brands could get Rivian-built software without ever setting foot in a Rivian showroom.

Rivian is chasing Tesla, whose Full Self-Driving (Supervised) system runs in more than 1.7 million active customer cars. Tesla says over 75 percent of its new North American buyers chose that package in the third quarter. Rivian is trying to catch up while designing chips, buying expensive sensors and paying for heavy AI computing, all as it ramps up the R2.

Research and development spending rose to $485 million in the quarter from $453 million, driven by AI and autonomy work. The company also warned that chips, memory and electronics are getting more expensive, and that the extra processors and lidar could squeeze the profit it hoped to make on high-volume R2s. It still loses money on each vehicle it sells, even after cutting the cost of goods per vehicle by more than $12,000 from the previous quarter.

Scaringe sees a bigger prize. Beyond the R2 and R3, he says, autonomy could let Rivian design very different vehicles for people who own a self-driving car. He also founded Mind Robotics, an industrial robot startup that is 31 percent owned by Rivian, and hired former Ford, Apple and Tesla executive Doug Field as its president. Its robots are meant for Rivian factories and for sale to other companies.