STOCKHOLM -- Chip supplier Nvidia is joining forces with Sweden's AB Volvo to develop artificial intelligence used in self-driving trucks, in a boost for the U.S. chipmaker that parted ways with Tesla last year.
The agreement announced on Tuesday by Nvidia and Volvo, the world's second-biggest truckmaker after Daimler, is a long-term partnership spanning several years. Work will begin immediately in Gothenburg, Sweden, and Santa Clara, Calif.
AB Volvo and Volvo Cars are separate entities. Volvo Cars is owned by China's Zhejiang Geely Holding Group. Geely also is AB Volvo's largest shareholder.
Volvo, which demonstrated its first autonomous truck last year, said the partnership would develop a flexible, scalable self-driving system, which is planned to be used first in pilot programs before commercial deployment.
"The resulting system is designed to safely handle fully autonomous driving on public roads and highways," Volvo said in a statement.
Nvidia, known for its powerful gaming graphics chips, has been aggressively expanding into the automotive sphere, where trucks -- with their regular routes that are easier to automate than cars navigating traffic -- may lead the way in self-driving.
Potential demand is strong in the United States in particular, where a shortage of truck drivers has been pushing up freight costs.
Together with Intel, Nvidia dominates the fast-growing AI chip market.