The government of South Korea, along with Samsung, LG, and Hyundai, will receive more than 260,000 of Nvidia’s most cutting-edge artificial intelligence (AI) processors.
All of the businesses will use AI chips in their facilities to create anything from robots to autonomous vehicles.
Days after Nvidia became the first company in the world to be valued at $5 trillion, Jensen Huang, CEO of Nvidia, stated that the country can now produce intelligence as a new export that will drive global transformation, just as Korea’s physical factories have inspired the world with sophisticated ships, cars, chips, and electronics.
The deal’s value and the anticipated completion date of the projects were not disclosed by Mr. Huang.
Speaking at a CEO event in Gyeongju, South Korea, on the fringes of Asia Pacific Economic Cooperation (Apec), Mr. Huang also stated that the chips will enable businesses to build “digital twins” with other manufacturers worldwide.
These agreements are a part of Nvidia’s most recent initiative to increase AI infrastructure globally and further incorporate AI into products and services.
Due to its global relationships, Nvidia became the first firm ever valued at $5 trillion (£3.8 trillion) on Wednesday.
Major automakers and semiconductor businesses are already based in South Korea, which aspires to become a regional center for artificial intelligence.
In response to US tariffs, President Lee Jae Myung declared he would give AI investment first priority once he took office.
The South Korean government intends to create “sovereign AI,” or computer infrastructure under its control, with the Nvidia deal.
More than 50,000 Nvidia chips will power data centers at the National AI Computing Center and facilities run by South Korean corporations such as Kakao and Naver.
Trapped in the midst
Nvidia is dealing with the consequences of the US-China trade war at the time of the South Korea deals.
Over a tenth of Nvidia’s sales came from China last year.
However, Huang recently stated that Nvidia’s AI market share in China is almost zero due to tensions between the two biggest economies in the world.
The chip giant relies on Asia Pacific’s tightly connected supply lines.
It is primarily a chip designer, hence it outsources the majority of its physical production to companies such as Samsung, SK Hynix, and TSMC.
TSMC has been an important partner for Nvidia, producing the company’s most powerful AI processors, including the flagship Blackwell series.
Samsung manufactures Nvidia’s H20 chips, which are a scaled-down processor designed for the Chinese market under US export regulations.
Concerns about the US supplying AI chips to China have long been raised by national security experts and some politicians, who claim Beijing may utilize the chips to gain an advantage in both military and AI applications.
According to analysts, US efforts to prevent China from obtaining cutting-edge computer chips have encouraged innovation in China.
Alibaba and Huawei have both released chips that they claim can compete with Nvidia’s offerings for the Chinese market.
In an effort to support its own tech sector, Beijing reportedly forbade local companies from purchasing from Nvidia and encouraged them to purchase from Chinese chipmakers.
Following his meeting with Xi on Thursday, Trump stated that Beijing will meet with Nvidia to discuss the company’s chip sales in China.
According to Trump, the US government will act as a kind of “referee” in the negotiations between China and the US corporation.
This week, a number of new agreements, such as collaborations with the US Department of Energy, Nokia, Uber, and Stellantis—actions meant to reassure investors that AI investments will provide returns—boosted Nvidia’s stock price even more.
Following trade negotiations between Presidents Trump and Xi, expectations of a resurgence in Chinese sales further increased the share price.
