Brainchip share price rockets 42% after signing agreement with tier 1 automotive supplier

The Brainchip Holdings Ltd (ASX: BRN) share price is surging after the small-cap ASX tech share announced a joint development agreement with a Tier 1 automotive supplier.

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The Brainchip Holdings Ltd (ASX: BRN) share price is charging higher today after the small-cap ASX tech share announced a joint development agreement with a tier 1 automotive supplier.

About Brainchip

Brainchip produces a neuromorphic processor that brings artificial intelligence to the edge in a way it believes is beyond the capabilities of other products. 

By mimicking brain processing, BrainChip has been able to pioneer a spiking neural network called Akida, which is both scalable and flexible to address the requirements in edge devices. Simply put, an edge device is any piece of hardware that controls data flow at the boundary between two networks, such as a router or a smartphone. 

Akida has been designed to provide a complete ultra-low power and fast AI Edge Network for vision, audio, olfactory and smart transducer applications. The reduction in system latency provides faster response and a more power-efficient system that can reduce the large carbon footprint of data centres.

Why is the Brainchip share price spiking?

This morning, the company announced it has signed a joint development agreement with Valeo Corporation that utilises Brainchip’s Akida neuromorphic System-on-Chip (SoC).

Valeo Corporation is a tier 1 European automotive supplier of sensors and systems for autonomous vehicles (AV) and advanced driver assistance systems (ADAS).

The agreement will see the two companies collaborate on the development of neural network processing solutions for AV and ADAS.

Brainchip believes the validation of its Akida device by a tier 1 supplier of this nature is a significant development.

In AV and ADAS applications, real-time processing of data is critical for the safety and reliability of autonomous systems. Suppliers and manufacturers in the automotive industry have reportedly recognised that the Akida SoC is ideally suited to process data at the “Edge” for their advanced system solutions.

According to Brainchip, by combining the Akida neural network processor with sensors, the resulting system can achieve ultra-low power, minimum latency, maximum reliability, and incremental learning.

“The Akida neural processor’s game-changing high performance and ultra-low power consumption, enables smart sensor integration by solving power and footprint challenges for a variety of sensor technologies,” the announcement read. 

Brainchip was a little light on details but stated the agreement provides for specific performance milestones and payments that are expected to cover the company’s expenses. The term of the agreement is defined by the achievement of performance milestones and the availability of the Akida device.

At the time of writing, the Brainchip share price has surged 42.04% higher to 12.5 cents per share. This takes the company’s current market capitalisation to around $183 million.

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