Nvidia has just dropped an absolutely huge bombshell. They will provide over 260,000 of their powerful new artificial intelligence (AI) chips to strategic partners in South Korea’s technology industry. This supply will benefit the South Korean government and powerful South Korean companies like Samsung, LG, and Hyundai. The merger deal marks a major victory for Nvidia. On top of that, they just became the first company in the world to achieve a $5 trillion valuation.
Nvidia’s chief executive, Jensen Huang, stressed that this partnership could be truly transformative. He stated, “Just as Korea’s physical factories have inspired the world with sophisticated ships, cars, chips and electronics, the nation can now produce intelligence as a new export that will drive global transformation.”
The deal delivers more than 50,000 Nvidia chips. These chips are uniquely suited to powering data centers at the National AI Computing Center. These chips will power places operated by South Korean firms such as Kakao and Naver. This move will definitely help cement Nvidia’s presence in the region.
Nvidia has been benefitting from this huge demand in South Korea. The company is now struggling in China, which accounted for more than one in ten of the company’s dollars last year. A growing set of geopolitical tensions has increasingly forced Nvidia to restrict its business in China. Recently, the U.S. government has been sounding the alarm about allowing the sale of U.S.-made advanced AI chips to China. In retaliation, Beijing is preventing Chinese firms from purchasing Nvidia products and pushing them to switch to domestic semiconductor manufacturers.
Due to the cumulative impacts of all these efforts, Nvidia’s market share in China has shrunk to almost none. The firm intends to have negotiations with Chinese officials in order to find possible application for its chips within the country. Huang’s optimistic comments show that partnership may still be possible even in today’s divided environment.
The U.S. government’s push to prevent China from obtaining advanced computer chips has unintentionally fueled Chinese innovation. Industry professionals recommend this is the reason behind major investment and establishment of domestic chip manufacturing infrastructure.
Huang did not divulge the cash specifics of the latest deal with South Korea. He didn’t provide any timeframe for when we might see these projects start to get underway. Industry insiders expect this cooperation to further secure Nvidia’s position in the Asian market.
Nvidia remains dependent on tightly interconnected supply chains throughout the Asia Pacific region, which are crucial for its operations and expansion plans. The company’s ability to navigate these complex relationships will be vital as it seeks to capitalize on emerging opportunities in AI technology across various markets.