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Nvidia must be scared about this. Losing a big client like Tesla for ASIICs could hurt bad. This on top of the crypto-crash must have NV shaking.
Interestingly, after the announcement, Tesla shares were down ~4% and Nvidia shares up ~2%...
Tesla shares are always down when news comes out. Basically no matter what.
That's interesting for the future of the car industry.

How important is self-driving capability going to be? Can a car manufacturer afford not to control this technology within their vehicles?

In the cellular telecoms space we've seen that Qualcomm wields huge power because they pretty much control the supply of cellular chipsets.

Depending on how important self-driving becomes we might see the same happening in the car industry. Clearly that's something car manufacturers should watch very closely.