NVIDIA Corp. (NASDAQ:NVDA) is expanding its reach into custom AI chips through a deeper partnership with MediaTek, giving NVIDIA another way to capture spending as major technology companies increasingly develop their own processors.
NVIDIA also invested $3.5 billion in convertible bonds issued by MediaTek, strengthening a partnership spanning data centers, PCs and vehicles.
NVIDIA Targets The Custom AI Chip Market
MediaTek will offer NVIDIA’s NVLink Fusion technology to customers developing their own AI chips. This will allow those processors to connect with NVIDIA’s broader AI infrastructure rather than requiring customers to build every surrounding component themselves.
Customers can design the computing portion that differentiates their chips while NVIDIA and MediaTek provide technology covering connectivity, memory, manufacturing, packaging and large-scale system deployment.
That approach helps NVIDIA remain involved even when cloud companies choose internally designed processors instead of NVIDIA GPUs.
MediaTek has been expanding beyond its core smartphone-chip business into custom chips for data centers. The company previously said its custom AI chip business could generate $2 billion in revenue this year, with a market opportunity of up to $80 billion by 2027.
The expansion could also increase competition with Broadcom Inc. (NASDAQ:AVGO), a major provider of custom chips to large technology companies, CNBC reported on Tuesday.
Partnership Extends To PCs And Cars
NVIDIA and MediaTek will also continue developing chips for PCs and other local AI systems. Their existing work includes the chip powering NVIDIA DGX Spark, while the companies plan additional products for consumer PCs.
The partnership also extends to vehicles, where MediaTek combines its automotive chips with NVIDIA’s AI and graphics technology.
NVIDIA CEO Jensen Huang said the companies are building platforms that bring NVIDIA computing into new markets while allowing customers to create differentiated AI systems at large scale.
NVDA Price Action: NVIDIA shares were down 1.15% at $218.24 during premarket trading on Tuesday, according to Benzinga Pro data.
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