By using Nvidia's end-to-end AI platform for training, simulation and in-vehicle computing, the pair aims to design a platform to safely handle fully autonomous driving on public roads and highways.
The solution will, however, be applicable to a wide range of vehicles, including ones used in mining.
"We continue to gradually introduce automated applications in the entire spectrum of automation, from driver-support systems to fully autonomous vehicles and machines," said Martin Lundstedt, president and CEO of the Volvo Group.
"This partnership with Nvidia is an important next step on that journey."
The partnership covers end-to-end computing fundamental to autonomous vehicles. It includes accelerated computing technology in the data centre for training deep neural networks; large-scale simulation for hardware-in-the-loop testing and validation of autonomous vehicle systems; and finally deployment of the Nvidia Drive platform in the vehicle running the full software stack for 360-degree sensor processing, mapping and path planning.
"The latest breakthroughs in AI and robotics bring a new level of intelligence and automation to address the transportation challenges we face," said Nvidia founder and CEO Jensen Huang.
The companies have entered a long-term partnership spanning several years, and work will begin immediately with personnel being co-located in Gothenburg, Sweden and Santa Clara, California, US.
The system will first be used in commercial pilots and later in commercial offerings from the Volvo Group.
"Automation is a key technology area for the Volvo Group. With this partnership we will further increase our speed of development and strengthen our long-term capabilities and assets within automation, to the benefit of our customers in different segments and markets," said Lars Stenqvist, Volvo Group chief technology officer.