Nvidia is committing $3.5 billion to Taiwanese chip manufacturer MediaTek. This agreement involves MediaTek adopting Nvidia’s technology, which will enable it to engineer bespoke chips for AI companies and hyperscalers, designed for seamless integration into Nvidia-powered data centers.
This deal emerges as a growing number of AI companies and major cloud providers, including Amazon, Google, Microsoft, OpenAI, and Anthropic, are investing in developing their own chips to reduce their dependence on Nvidia’s GPUs. Such partnerships, like the one with MediaTek, allow Nvidia to concede ground to custom silicon solutions while still maintaining its dominance in data center infrastructure.
Dion Harris, Nvidia’s senior director of HPC and AI hyperscaler infrastructure solutions, stated on a call with reporters Monday that “Nvidia is an AI infrastructure company,” further adding, “We expanded beyond pure computing chips years ago.”
The collaboration highlights the cyclical nature of Nvidia’s financial strategies over recent years, where the chip giant frequently invests in companies that subsequently contribute back to its own ecosystem. This agreement will grant MediaTek access to Nvidia’s NVLink Fusion ecosystem, including NVLink, a technology enabling rapid communication between any chips, even those not manufactured by Nvidia.
Just last week, Nvidia announced a comparable partnership with Amazon Web Services, though without a direct investment. AWS plans to deploy an additional 2 million Nvidia GPUs across its infrastructure and also integrate NVLink Fusion.
Through this Nvidia partnership, MediaTek can continue to develop custom chips for cloud companies or AI labs, tailored to their specific workloads, by leveraging Nvidia’s “proven scale-up and scale-out technology stack and ecosystem” and its “rack-scale architecture.”
“Basically, every cloud, every model builder is deploying our platform in some shape, form, or fashion,” Harris commented. He added, “So by MediaTek being able to offer this extension to its customers, it allows them to standardize on the rack-scale infrastructure across their AI factories… and also deploy their [custom chips] right alongside those using the same standard platform.”
“This is really about opening up this ecosystem to the entire MediaTek customer base,” Harris further explained.
While MediaTek has not publicly shared details regarding its custom AI chip customer base, it’s evident that Nvidia aims to help expand this business segment, thereby benefiting itself. MediaTek has been progressively building its custom data center ASIC (application-specific integrated circuit) operations, projecting in June that this division will generate $2 billion in revenue by 2026, with ambitions to capture a larger market share in the coming years.
Given MediaTek’s expertise in developing custom chips for smartphones, smart homes, automobiles, and wireless communications, the company will also continue its collaboration with Nvidia on DGX Spark, Nvidia’s compact, developer-focused desktop AI computer. Their partnership has expanded to include RTX Spark, Nvidia’s initiative to integrate its AI technology into consumer AI PCs.
MediaTek and Nvidia will also persist in “developing platforms for AI-powered, software-defined vehicles in the era of physical AI,” according to a press release. MediaTek’s automotive platforms utilize Nvidia’s RTX graphics for intelligent vehicle cockpits and function alongside Nvidia Drive AGX, the company’s in-car computing platform for autonomous driving workloads.
Jensen Huang, founder and CEO of Nvidia, stated, “AI is transforming every computing platform — from the world’s largest AI factories to the PC and the car.” He concluded, “Together, we’re building platforms that bring NVIDIA accelerated computing to new markets and give customers the freedom to create differentiated AI systems at enormous scale.”