diff --git a/.gitignore b/.gitignore
index 8e22339a..b5127de0 100644
--- a/.gitignore
+++ b/.gitignore
@@ -4,7 +4,7 @@
 /share/
 /static/
 /db.sqlite3
-/.env
+/.*env*
 /keys
 /logs
 /profiles
diff --git a/CHANGELOG.md b/CHANGELOG.md
index b4b4cedd..fe34e93d 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -12,7 +12,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 
 ### Changed
-- TDB
+- Bumped nuclio version to 1.8.14 (<https://github.com/cvat-ai/cvat/pull/29>)
 
 ### Deprecated
 - TDB
diff --git a/components/serverless/docker-compose.serverless.yml b/components/serverless/docker-compose.serverless.yml
index 34414dfc..a46e87ff 100644
--- a/components/serverless/docker-compose.serverless.yml
+++ b/components/serverless/docker-compose.serverless.yml
@@ -2,7 +2,7 @@ version: '3.3'
 services:
   nuclio:
     container_name: nuclio
-    image: quay.io/nuclio/dashboard:1.5.16-amd64
+    image: quay.io/nuclio/dashboard:1.8.14-amd64
     restart: always
     networks:
       - cvat
diff --git a/cvat/apps/lambda_manager/tests/test_lambda.py b/cvat/apps/lambda_manager/tests/test_lambda.py
index 831ff682..4abfcf3b 100644
--- a/cvat/apps/lambda_manager/tests/test_lambda.py
+++ b/cvat/apps/lambda_manager/tests/test_lambda.py
@@ -75,66 +75,65 @@ class LambdaTestCase(APITestCase):
     def setUp(self):
         self.client = APIClient()
 
-        patcher = mock.patch('cvat.apps.lambda_manager.views.LambdaGateway._http', side_effect = self.__get_response_data_from_lambda_gateway_http)
-        self.addCleanup(patcher.stop)
-        patcher.start()
+        http_patcher = mock.patch('cvat.apps.lambda_manager.views.LambdaGateway._http', side_effect = self.__get_data_from_lambda_manager_http)
+        self.addCleanup(http_patcher.stop)
+        http_patcher.start()
+
+        invoke_patcher = mock.patch('cvat.apps.lambda_manager.views.LambdaGateway.invoke', side_effect = self.__invoke_function)
+        self.addCleanup(invoke_patcher.stop)
+        invoke_patcher.start()
 
         images_main_task = self._generate_task_images(3)
         images_assigneed_to_user_task = self._generate_task_images(3)
         self.main_task = self._create_task(tasks["main"], images_main_task)
         self.assigneed_to_user_task = self._create_task(tasks["assigneed_to_user"], images_assigneed_to_user_task)
 
-
-    def __get_response_data_from_lambda_gateway_http(self, *args, **kwargs):
+    def __get_data_from_lambda_manager_http(self, **kwargs):
         url = kwargs["url"]
-        # POST query for get annotations
-        if url == "/api/function_invocations":
-            data = []
-            id_function = kwargs["headers"]["x-nuclio-function-name"]
-            type_function = functions["positive"][id_function]["metadata"]["annotations"]["type"]
-            if type_function == "reid":
-                if id_function == id_function_reid_response_data:
-                    data = [0, 1]
-                else:
-                    data = []
-            elif type_function == "tracker":
-                data = {
-                    "shape": [12.34, 34.0, 35.01, 41.99],
-                    "state": {"key": "value"},
-                }
-            elif type_function == "interactor":
-                data = [
-                    [8, 12],
-                    [34, 56],
-                    [77, 77],
-                ]
-            elif type_function == "detector":
-                data = [
-                    {'confidence': '0.9959098', 'label': 'car', 'points': [3, 3, 15, 15], 'type': 'rectangle'},
-                    {'confidence': '0.89535173', 'label': 'car', 'points': [20, 25, 30, 35], 'type': 'rectangle'},
-                    {'confidence': '0.59464583', 'label': 'car', 'points': [12.17, 45.0, 69.80, 18.99], 'type': 'polygon'},
-                ]
-            return data
-        # GET query for get all functions
-        elif url == "/api/functions":
+        if url == "/api/functions":
             return functions["positive"]
-        # GET query for get function
         else:
-            id_function = url.split("/")[-1]
-            if id_function in functions["positive"]:
-                # raise 500 Internal_Server error
-                if id_function in [id_function_state_building, id_function_state_error]:
+            func_id = url.split("/")[-1]
+            if func_id in functions["positive"]:
+                if func_id in [id_function_state_building, id_function_state_error]:
                     r = requests.RequestException()
                     r.response = HttpResponseServerError()
-                    raise r
-                # return values
-                return functions["positive"][id_function]
-            # raise 404 Not Found error
+                    raise r # raise 500 Internal_Server error
+
+                return functions["positive"][func_id]
             else:
                 r = requests.HTTPError()
                 r.response = HttpResponseNotFound()
-                raise r
-
+                raise r # raise 404 Not Found error
+
+    def __invoke_function(self, func, payload):
+        data = []
+        func_id = func.id
+        type_function = functions["positive"][func_id]["metadata"]["annotations"]["type"]
+        if type_function == "reid":
+            if func_id == id_function_reid_response_data:
+                data = [0, 1]
+            else:
+                data = []
+        elif type_function == "tracker":
+            data = {
+                "shape": [12.34, 34.0, 35.01, 41.99],
+                "state": {"key": "value"},
+            }
+        elif type_function == "interactor":
+            data = [
+                [8, 12],
+                [34, 56],
+                [77, 77],
+            ]
+        elif type_function == "detector":
+            data = [
+                {'confidence': '0.9959098', 'label': 'car', 'points': [3, 3, 15, 15], 'type': 'rectangle'},
+                {'confidence': '0.89535173', 'label': 'car', 'points': [20, 25, 30, 35], 'type': 'rectangle'},
+                {'confidence': '0.59464583', 'label': 'car', 'points': [12.17, 45.0, 69.80, 18.99], 'type': 'polygon'},
+            ]
+
+        return data
 
     @classmethod
     def _create_db_users(cls):
diff --git a/cvat/apps/lambda_manager/views.py b/cvat/apps/lambda_manager/views.py
index 47b80e1f..6bdf5d14 100644
--- a/cvat/apps/lambda_manager/views.py
+++ b/cvat/apps/lambda_manager/views.py
@@ -11,6 +11,7 @@ from copy import deepcopy
 import django_rq
 import requests
 import rq
+import os
 from django.conf import settings
 from django.core.exceptions import ObjectDoesNotExist, ValidationError
 from rest_framework import status, viewsets
@@ -75,17 +76,18 @@ class LambdaGateway:
         return response
 
     def invoke(self, func, payload):
-        # NOTE: it is overhead to invoke a function using nuclio
-        # dashboard REST API. Better to call host.docker.internal:<port>
-        # Look at https://github.com/docker/for-linux/issues/264.
-        # host.docker.internal isn't supported by docker on Linux.
-        # There are many workarounds but let's try to use the
-        # simple solution.
-        return self._http(method="post", url='/api/function_invocations',
-            data=payload, headers={
-                'x-nuclio-function-name': func.id,
-                'x-nuclio-path': '/'
-            })
+        # Note: call the function directly without the nuclio dashboard
+        # host.docker.internal for Linux will work only with Docker 20.10+
+        NUCLIO_TIMEOUT = settings.NUCLIO['DEFAULT_TIMEOUT']
+        if os.path.exists('/.dockerenv'): # inside a docker container
+            url = f'http://host.docker.internal:{func.port}'
+        else:
+            url = f'http://localhost:{func.port}'
+        reply = requests.post(url, timeout=NUCLIO_TIMEOUT, json=payload)
+        reply.raise_for_status()
+        response = reply.json()
+
+        return response
 
 class LambdaFunction:
     def __init__(self, gateway, data):
diff --git a/docker-compose.yml b/docker-compose.yml
index dc09494f..f0a6cacf 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -52,6 +52,8 @@ services:
       - cvat_logs:/home/django/logs
     networks:
       - cvat
+    extra_hosts:
+      - "host.docker.internal:host-gateway"
 
   cvat_ui:
     container_name: cvat_ui
diff --git a/site/content/en/docs/administration/advanced/installation_automatic_annotation.md b/site/content/en/docs/administration/advanced/installation_automatic_annotation.md
index 0457631a..bdc1c355 100644
--- a/site/content/en/docs/administration/advanced/installation_automatic_annotation.md
+++ b/site/content/en/docs/administration/advanced/installation_automatic_annotation.md
@@ -29,7 +29,7 @@ description: 'Information about the installation of components needed for semi-a
   ```
 
 - You have to install `nuctl` command line tool to build and deploy serverless
-  functions. Download [version 1.5.16](https://github.com/nuclio/nuclio/releases/tag/1.5.16).
+  functions. Download [version 1.8.14](https://github.com/nuclio/nuclio/releases/tag/1.8.14).
   It is important that the version you download matches the version in
   [docker-compose.serverless.yml](https://github.com/openvinotoolkit/cvat/blob/develop/components/serverless/docker-compose.serverless.yml).
   For example, using wget.