Cerence (CRNC, Financial), a U.S. automotive AI voice technology firm, announced a strengthened partnership with NVIDIA (NVDA) to improve language model performance in its in-car systems. This news propelled Cerence's stock price to soar by over 120% during trading sessions, accumulating a 165% gain over the last six months. The alliance with NVIDIA, a leader in AI infrastructure, is expected to bolster Cerence's credibility and technological strength, while reducing research and development costs and accelerating product launches.
In the competitive automotive AI market, Cerence faces rivals like SoundHound and Nuance, companies also offering voice assistants and intelligent interaction technology. By leveraging NVIDIA's tech, Cerence aims to meet the growing consumer demand for efficient and secure in-car voice assistants capable of robust operation in various complex scenarios.
Cerence employs a "cloud + edge" strategy, offering both cloud server processing and edge computing solutions, which enhances flexibility and reduces risks associated with technological limitations. This collaboration is a significant advancement in automotive AI deployment, optimizing Cerence's CaLLM (cloud language model) and CaLLM Edge (edge computing language model) using NVIDIA's powerful AI Enterprise software and DRIVE AGX Orin hardware platform, both designed for high-performance AI computation.
In the past year, Cerence reported a revenue of $331.5 million with a gross margin of 73.7%. The company exceeded expectations in the fourth quarter with $54.8 million in revenue and a negative adjusted EBITDA of $1.9 million. Cerence forecasts a free cash flow of $25 million for the fiscal year 2025.
