US chip giant Nvidia will supply more than 260,000 of its most advanced artificial intelligence (AI) chips to South Korea's government, as well as Samsung, LG, and Hyundai.

The companies will all deploy the AI chips in factories to make everything from semiconductors and robots to autonomous vehicles, marking a significant step where South Korea can 'now produce intelligence as a new export,' said CEO Jensen Huang.

While the financial details of the contracts were not disclosed, this week also witnessed Nvidia becoming the first company ever to be valued at $5 trillion, showcasing its meteoric rise in the tech industry.

Speaking at a CEO summit during the Asia Pacific Economic Cooperation (APEC) in Gyeongju, Huang highlighted that the collaboration would enable the companies to create 'digital twins' linked to other factories globally, enhancing operational capacities.

This strategic partnership underscores Nvidia's ongoing efforts to advance AI infrastructure worldwide and further integrate AI technology into various products and services.

The South Korean partnerships come at a critical time as Nvidia navigates the repercussions of the US-China trade tensions. Notably, while China accounted for a significant portion of Nvidia's revenue last year, access to the Chinese market has deteriorated, prompting Huang to express disappointment over losing market share.

Huang affirmed his interest in re-entering the Chinese market, stating that it's in both nations' best interests to facilitate technology transfers. He hopes for new policies that would allow for continued sales of advanced chips to China.

As South Korea strives to establish itself as a regional AI powerhouse, the agreements with Nvidia will support the construction of crucial data centers and a computing infrastructure overseen by the South Korean government, with plans for 'sovereign AI' capabilities.

Thus, this partnership emphasizes not only the pivotal role Nvidia plays in AI technology but also the strategic alliances shaping the future landscape of global technology development.