AMD, Microsoft, and Siemens Join Forces to Accelerate Software-Defined Vehicle Development

AMD has partnered with Microsoft and Siemens to launch a cloud-based development environment that uses digital twins to speed up vehicle software testing.

NewDecoded

Published Jan 4, 2026

Jan 4, 2026

3 min read

Image by AMD

AMD is partnering with Microsoft and Siemens to change the way software-defined vehicles are developed using a cloud-first approach. This initiative focuses on the shift-left methodology, allowing engineers to test and validate vehicle software long before the physical hardware is even built. By leveraging cloud-based simulations, automakers can significantly reduce development risks and accelerate their time to market. The collaboration introduces the AMD Virtualized Automotive Stack (VAS) to the Microsoft Azure cloud platform. Specifically, it utilizes NVads V710 v5-series virtual machines powered by AMD Radeon PRO V710 GPUs and EPYC processors. This provides the high-performance compute and graphics power necessary to run complex, data-heavy automotive simulations in a scalable environment.

A Cloud-Native Sandbox for Automotive Engineering

A major technical milestone in this announcement is the introduction of nested virtualization for automotive workloads on Azure. By running the Xen Hypervisor on top of Microsoft Hyper-V, the system can accurately replicate the actual software isolation found in modern cars. This allows developers to test how safety-critical systems interact with infotainment features on a single virtual chip.

Siemens is contributing its PAVE360 digital twin environment to the stack, creating a bit-accurate simulation of the vehicle's behavior. This integration allows developers to model system-level interactions and validate mixed-criticality workloads with high precision. It serves as a powerful virtual sandbox that helps ensure reliability across diverse automotive applications.

This new development ecosystem will be showcased during live demonstrations at CES 2026. The focus will be on demonstrating how these cloud tools power next-gen features like advanced driver assistance and immersive digital cockpits. The partnership aims to provide a standardized, scalable pathway for the global automotive industry as it moves toward a software-defined future.

Decoded Take

This collaboration signals a significant shift in automotive engineering by moving software validation from physical prototypes to early-stage cloud simulations. By integrating AMD's Virtualized Automotive Stack with Azure and Siemens' PAVE360, the industry is adopting a "shift-left" approach that decouples software design from hardware manufacturing. This positioning allows AMD to compete more aggressively with platform-locked competitors by offering an open-standards alternative that utilizes existing x86 and cloud infrastructure. Ultimately, this move aims to lower the massive costs and risks associated with building the increasingly complex software systems required for the next generation of intelligent cars.