In what is seen as a blow to NVIDIA Corp. (NVDA) Tesla Inc. (TSLA) is reportedly testing its own semiconductor for self-driving cars.

Citing a source familiar with the matter, CNBC reported that the green car manufacturer has already received and is currently testing samples of its own chip. The move is aimed at reducing its reliance on NVIDIA and other companies as it continues to manufacture vehicles. CNBC noted Tesla is working with Advanced Micro Devices Inc. (AMD) and will build its own chip on the intellectual property of one of NVIDIA’s biggest rivals. The chip is aimed at getting the company closer to its vision to deliver a completely self-driving car by 2019. The internal chip program is being headed by Jim Keller, who has been in charge of the Autopilot unit since June. CNBC reported that more than 50 people are working on the profect. (See also: NVIDIA Could Make $1B From Tesla's Self-Driving Decree: Analyst.)

Are the Reports True? 

News of Tesla’s move was pressuring NVIDIA’s stock in early morning trading with shares down 2.4%  or $4.41 to $181.43 a share. Meanwhile, shares of AMD were up 2.04% or $0.28 to $14.02 a share. But at least one bull, RBC Capital Markets, told investors not to overreact and to “ignore the noise” about the CNBC report. In a research note to clients, RBC’s Mitch Steves reiterated his outperform rating and $205 price target, arguing that if the report proves to be true and NVIDIA is no longer the only provider of chips to Tesla, it will still remain a leader in the market. The analyst pointed out that neither company has confirmed the news. (See also: AMD Is a Sell, Positioned to Crash 70%: Citigroup.)

“We view this announcement as similar to dynamics we anticipate to occur in the data center: AMD winning some share while NVDA remains as the de-facto standard and market share leader,” wrote the analyst in the note covered by Barron’s. “We view the announcement as a near-term concern that should not impact the story over the next several years. AMD will likely gain some share both in auto and [data center] but we believe Nvidia will remain as the market share leader.” What’s more, the analyst said he thinks Tesla will continue to use NVIDIA’s semiconductors for artificial intelligence workloads while AMD chips will be deployed for specific jobs. That way Tesla isn’t 100% reliant on NVIDIA, noted the analyst. The main read from the potential move is ultimately a positive according to Steves: “the value of AI chips is continuing to increase which is causing companies to look in some instances to dual source.”

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