Nvidia, the leading US chip manufacturer, has announced a landmark agreement to supply more than 260,000 of its state-of-the-art artificial intelligence (AI) chips to South Korea's government and prominent tech companies, including Samsung, LG, and Hyundai.
The deployment of these chips is aimed at revolutionizing production across various sectors, including semiconductors, robotics, and autonomous vehicles. Nvidia’s CEO, Jensen Huang, highlighted that this development positions South Korea to establish AI as a key export.
While the financial details of the contracts were not disclosed, this announcement coincides with a substantial week for Nvidia, which recently became the first company ever valued at $5 trillion. The tech giant is also poised to benefit from a potential thaw in US-China trade relations, which may facilitate greater access to the Chinese market for its products.
Addressing the need for enhanced AI capabilities at a CEO summit during the Asia Pacific Economic Cooperation (APEC) forum in Gyeongju, Huang expressed that the new technology will enable South Korean companies to create 'digital twins'—replicas of their factories that optimize operations using AI.
As the deal progresses, South Korea is determined to become a regional hub for AI, establishing a computing infrastructure that it will manage directly, referred to as 'sovereign AI.' More than 50,000 of the supplied chips are anticipated to power data centers across the nation.
These developments arrive amid challenges relating to the US-China trade tensions, which have previously impacted Nvidia’s revenue from Chinese markets. Huang voiced his disappointment regarding the loss of Nvidia's market share in China, stating, 'We used to have 95% share of the AI business in China. Now we're at 0% share.'
In contrast, he stressed the importance of reopening the Chinese market for technological collaboration, pointing out the mutual benefits for both nations.
With this initiative, Nvidia aims to bolster its global presence while contributing to South Korea’s strategic objectives of AI development and innovation.
