Ambarella, the company that once made chips for GoPro, is now up for sale.

Today, let's talk about an AI chip company—Ambarella. You may not have heard of this company, but you must know GoPro, right? The once-popular action camera used video processing chips made by Ambarella. Thanks to its low power consumption and high image processing quality, Ambarella made a fortune and became a star supplier for action cameras, dash cams, and security cameras.

However, the glory didn't last long. GoPro later fell behind in innovation, and the market cooled down, leading to a decline in Ambarella's revenue. As a result, it began to pivot, entering the automotive AI chip market and even acquiring an Italian company specializing in autonomous driving algorithms.

To be honest, Ambarella isn't bad in terms of technology. It developed its own architecture called CVflow, from CV22 to CV3, with shipments exceeding 30 million units, deployed in many vehicle models, such as front-facing cameras, parking assistance systems, and even supporting L2 and L3 autonomous driving features.

Low power consumption and controllable costs are its advantages. But the problem is clear: it's not making money. Since 2017, Ambarella hasn't achieved annual profitability. Even with a recent 50% revenue increase, its quarterly net loss still exceeds $20 million. The pressure is mounting. Besides losses, Ambarella faces several challenges: customer concentration; strong technology but weak ecosystem. Automakers, especially Chinese ones, are no longer impressed by Nvidia, let alone third-party (foreign) autonomous driving chips. The competition is brutal. With Nvidia at the top, Qualcomm and a slew of domestic competitors in the middle, and Nio, XPeng, and Li Auto developing their own chips, the market space is shrinking.

So now, Ambarella is reportedly considering a sale. From a technical standpoint, it still has value—IP, customers, and shipment records.

Selling might be the more rational choice. For buyers, it's about filling the ecosystem gap; for Ambarella, it's an exit and a landing.

Ambarella started with video chips, rose to fame with GoPro, and later pivoted to automotive AI chips. From a design perspective, its chips aren't bad, but the market is too competitive, and it hasn't been profitable. Now, it's considering selling itself. This is a microcosm of the edge AI chip industry—having technology doesn't guarantee survival.

The autonomous driving chip market is already a super red ocean, and it's getting harder to navigate!