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8/30/2025 8:54:36 PM

Musk has been parading around in his AI clothes for a while now. With the amount he screams and shouts about AI, you’d think he invented it. Of course, like everything else Musk peddles, he had nothing to do with its invention or development, except for underpaying and overworking his engineers and being an awful, overpromising PR man. However, people aren’t just noticing that Musk’s clothes are non-existent — they are also starting to point and laugh at his skid marks and the “I Love the Nazi Man” tattoo down his back. Why? Because he just can’t seem to get his AI up and working. And there is no little blue pill to remedy this situation.

Take, for example, Tesla’s hilariously crap Robotaxi rollout. The media at large is only just cottoning on to it being a huge PR stunt.

I have gone on ad nauseam about why Tesla’s self-driving cars are completely inadequate, so if you want to know the details, read my previous article here. But the helicopter view is that, unlike other autonomous vehicles, Tesla’s system has zero redundancy or safety nets and requires a nearly 100% accurate AI — which categorically can’t exist — to be even remotely safe.

Tesla is painfully aware of this fatal flaw, with Tesla engineers whistleblowing their concerns about it to the media (read more here) and the DOJ opening an investigation (read more here). So I, along with countless other commentators, was pretty damn relieved to find out that Tesla’s Robotaxis had safety drivers. There was even mention of remote workers being able to take control of the car and drive it safely in the case of a critical disengagement.

But this kind of system isn’t impressive enough for Musk. Any Uber or Lyft driver with a Tesla who wastes their money on FSD can do the exact same thing. There is no social or investor kudos to be gained for Tesla or Musk here. And here is a hint: Musk doesn’t make money from Tesla sales. After all, his $50 billion pay packet (which is now less, thanks to Musk tanking Tesla’s valuation) was the equivalent of him getting $10,000 for every Tesla ever sold! Tesla makes substantially less profit from every car sold than that.

So, what do you do if you have bet your entire company’s valuation on autonomous technology that you simply can’t deliver on?

Fudge it.

Tesla put the safety driver in the passenger seat! Because, look, it’s a self-driving car — there is no one in the driver’s seat!

This is a dangerous move that offers no benefit other than optics.

Rather than being able to properly take over the car and drive it to safety, the only thing these safety drivers could do was press a button to bring the vehicle to a stop. Which, as anyone with a driving licence will tell you, is not always the safest option! Particularly when you consider that Robotaxis have been spotted driving into lanes of oncoming traffic.

Yet, this bafflingly shite decision wasn’t really reported on. Or at least it wasn’t until a video surfaced a few days ago that showed FSD failing and a safety driver being forced to exit the vehicle in the middle of traffic to take the driver’s seat and regain control. (watch it here).

This shows just how wildly dangerous Tesla’s Robotaxis are.

The safety driver had to take a serious risk to take control of the car. Not only that, but this incident suggests there are no remote operatives capable of taking over when things go wrong. That has been a core safety feature of all developing self-driving ride-hailing services, such as Waymo and Cruise, since day one and is routinely used to keep passengers safe. The fact that this is absent for Robotaxis, which Tesla already know have a far, far higher critical disengagement rate than any other self-driving ride-hailing service, could easily be seen as insanely negligent.

Musk is comfortable putting other people — not just the safety driver, but paying passengers and the public — in danger, all for a crappy PR stunt to cover up how bad his self-driving system actually is. And the media at large, as well as public consensus, are beginning to catch up to this horrifying fact.

However, Musk’s AI woes go far, far deeper than that.

Ambarella, Inc. (NASDAQ: AMBA) has emerged as a standout performer in the edge AI semiconductor sector, driven by a combination of technological innovation, strategic market positioning, and robust financial growth. In Q2 2026, the company reported revenue of $95.5 million, a 49.9% year-over-year increase, with non-GAAP net profit turning positive at $6.4 million compared to a $5.5 million loss in the prior year [1]. This surge reflects Ambarella’s dominance in edge AI applications such as portable video devices, robotic aerial drones, and automotive systems, where its CVflow architecture delivers unmatched power efficiency and real-time analytics [2].

Strategic Momentum: Niche Specialization and Scalable Applications

Ambarella’s competitive edge lies in its focus on low-power, high-performance system-on-chip (SoC) solutions tailored for edge computing. Unlike NVIDIA’s Jetson Orin (275 TOPS) or Qualcomm’s Snapdragon 8 Elite, which prioritize raw computational power for robotics and mobile AI, Ambarella’s CV5 and N1655 SoCs excel in video-centric edge devices. For instance, its 5nm AI SoCs enable 8K video processing in security cameras and anti-gravity drones like Insta360’s A1, while its Oculii 4D imaging radar is deployed in Lotus’s L2+ autonomous vehicles [3]. This specialization has allowed Ambarella to capture a majority share in the mid- and high-end security camera market outside China and expand into automotive and industrial IoT segments [4].

The company’s Hybrid AI (HAI) architecture further amplifies its scalability. By combining on-device AI inference with cloud connectivity, Ambarella’s SoCs support GenAI models ranging from 0.5 to 34 billion parameters, enabling applications from smart home devices to autonomous systems [5]. HAI revenue is projected to account for 80% of total sales in FY2026, underscoring its role as a growth engine [6].

Market Positioning: Capitalizing on Edge AI’s Explosive Growth

The edge AI semiconductor market is expanding rapidly, with a projected CAGR of 17.6% through 2030, reaching $58.9 billion by 2030 [7]. Ambarella’s strategic partnerships and design wins position it to benefit from this growth. For example, its collaboration with Gauzy on ADAS solutions has led to deployments in Ford Trucks, while its driver monitoring system with LG was showcased at CES 2025 [8]. These partnerships highlight Ambarella’s ability to integrate edge AI into safety-critical applications, a trend accelerating with the rise of autonomous vehicles and smart infrastructure.

Risks and Challenges: Profitability and Competitive Pressures

Despite its momentum, Ambarella faces challenges. Its EBIT margin remains negative at -33%, and the company relies on a single logistics provider, exposing it to supply chain risks [9]. Additionally, while it leads in niche markets, broader competitors like NVIDIA and Qualcomm are expanding into edge AI, leveraging their ecosystem advantages. For instance, NVIDIA’s Blackwell architecture targets enterprise AI workloads, while Qualcomm’s Cloud AI 100 Pro competes in mobile and automotive AI [10]. Ambarella must also contend with rising competition from Chinese firms developing localized alternatives, which could erode its market share in the long term.

Conclusion: A High-Growth Play with Caution

Ambarella’s accelerating edge AI growth and strategic focus on high-ASP applications make it an attractive investment for semiconductor investors. Its ability to innovate in video-centric edge devices, coupled with a strong balance sheet ($259 million in cash) and disciplined cost management, positions it to capitalize on the $58.9 billion edge AI market [11]. However, investors should monitor its path to profitability and the risks posed by supply chain constraints and competitive pressures. Notably, historical data from earnings release events since 2022 suggests a tendency for underperformance in the post-announcement period, with average cumulative returns declining by approximately -3% over 30 days [12]. For those willing to navigate these challenges, Ambarella represents a compelling opportunity in the transformative edge computing era.

Source:
[1] Ambarella, Inc. Announces Second Quarter Fiscal Year 2026 Financial Results [https://ambarella.gcs-web.com/news-releases/news-release-details/ambarella-inc-announces-second-quarter-fiscal-year-2026]
[2] Ambarella, Inc. (AMBA) – in seconds. [https://www.tenzingmemo.com/companies/amba_ambarella-inc]
[3] Ambarella’s Strategic Position in the HAI and Edge AI Markets: A High-Growth Play for 2026 and Beyond [https://www.ainvest.com/news/ambarella-strategic-position-hai-edge-ai-markets-high-growth-play-2026-2508/]
[4] Top 20 AI Chip Makers: NVIDIA & Its Competitors [https://research.aimultiple.com/ai-chip-makers/]
[5] Ambarella (AMBA) Q2 2026 Earnings Call Transcript [https://www.fool.com/earnings/call-transcripts/2025/08/28/ambarella-amba-q2-2026-earnings-call-transcript/]
[6] Ambarella’s Edge AI Growth Strategy: Balancing IoT Momentum and Automotive Potential for Long-Term Margin Expansion [https://www.ainvest.com/news/ambarella-edge-ai-growth-strategy-balancing-iot-momentum-automotive-potential-long-term-margin-expansion-2508/]
[7] Edge AI Hardware Market Size, Share & Trends [https://www.marketsandmarkets.com/Market-Reports/edge-ai-hardware-market-158498281.html]
[8] Gauzy, Ambarella Partner to Advance ADAS with Edge AI [https://www.engineering.com/gauzy-ambarella-partner-to-advance-adas-with-edge-ai/]
[9] Ambarella Stock Soars Amid Market Volatility and Positive Technological Advancements [https://stockstotrade.com/news/ambarellainc-amba-news-2025_08_30/]
[10] What are the top edge AI chips of 2025? [https://www.engineersgarage.com/what-are-the-top-edge-ai-chips-of-2025/]
[11] AI Chip Statistics 2025: Funding, Startups & Industry Giants [https://sqmagazine.co.uk/ai-chip-statistics/]
[12] Backtest results for AMBA earnings release impact (2022–2025).
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