Nvidia will supply more than 260,000 of its most advanced AI chips to South Korea’s government, Samsung, LG, and Hyundai in a deal that transforms the country into an artificial intelligence manufacturing powerhouse. The US chip giant announced the partnerships days after becoming the first company in the world to be valued at $5 trillion, marking a historic milestone in the tech industry.
South Korea now positions itself as a regional hub for artificial intelligence production after securing this landmark agreement with the chip giant. The deals will enable companies to deploy AI chips in factories across the country, transforming how they make everything from robots to autonomous vehicles. Chief executive Jensen Huang said the agreement meant that South Korea can “now produce intelligence as a new export,” opening unprecedented opportunities for the nation’s tech sector.
The government and major manufacturers will integrate these advanced chips into their production lines, creating what Mr Huang calls “digital twins” with other factories around the world. This technology allows companies to replicate and optimize manufacturing processes across international locations, revolutionizing global production standards.
Nvidia reached a historic $5tn (£3.8tn) valuation on Wednesday, cementing its position as the most valuable company ever in tech history. This achievement came as the chip designer announced a wave of new deals, including partnerships with the US Department of Energy, Nokia, Uber, and Stellantis—moves aimed at reassuring investors that AI investments will deliver returns in practical applications.
Speaking at a CEO summit on the sidelines of the Asia Pacific Economic Cooperation (Apec) in Gyeongju, Mr Huang outlined how these agreements form part of the company’s latest effort to expand AI infrastructure globally. The strategy seeks to further integrate AI into products and services across multiple industries, from automotive to energy systems. You can see how Nvidia’s striking international partnerships have helped it become the dominant force in artificial intelligence hardware.
Nvidia grapples with the fallout of the China-US trade war, which has dramatically reshaped its business landscape. China made up more than a tenth of Nvidia’s revenue last year, but the extent of China’s access to Nvidia’s chips has been a point of friction with Washington. The tech boss revealed a stark reality: “We used to have 95% share of the AI business in China. Now we’re at 0% share. And I’m disappointed by that,” Huang said in Gyeongju on Friday.
Trump said after his meeting with Xi on Thursday that Beijing will hold talks with Nvidia to discuss sales of its chips in China. The US President indicated the talks were between China and the US company, but that the government will play the role of a “referee” of sorts. Huang said he would like to sell Nvidia’s state-of-the-art Blackwell chips to China, although the decision needed to be made by the US President. The situation highlights how American technology has become central to global tech diplomacy.
Beijing has reportedly prohibited local firms from buying from Nvidia, urging them to buy from Chinese chipmakers to give its domestic tech industry a boost. This policy has fostered innovation within China, where both Huawei and Alibaba have unveiled their own chips that they say can rival Nvidia’s products for the Chinese market. Analysts say that US efforts to block China’s access to advanced computer chips have accelerated this development.
National security experts and some politicians have long voiced concerns about the US selling AI chips to China, saying that Beijing could use them to gain an advantage in AI, as well as in military applications. However, Huang emphasized: “We respect deeply the capabilities of China,” acknowledging the country’s technological prowess. The tech boss had no news on China sales, or the talks between the two leaders, but said he hopes they’ll find a way to have new policies that allow chips back into the market.
The chip giant is dependent on tightly-knit supply chains that run through the Asia Pacific region, making these deals strategically vital for Nvidia’s operations. Nvidia is primarily a chip designer, and so outsources most of its physical production to manufacturers like Samsung, SK Hynix, and TSMC. This arrangement makes the South Korean partnerships even more critical for the company’s long-term success.
TSMC has been a critical partner for Nvidia, making the company’s most advanced AI chips, including its flagship Blackwell series. Meanwhile, Samsung makes parts for Nvidia’s H20 chips, a scaled-down processor made for the Chinese market under US export rules. You should understand that this tightly-connected ecosystem means any disruption in one region affects the entire global AI infrastructure.
With the Nvidia deal, the South Korean government plans to build computing infrastructure that it will control, a term known as “sovereign AI”. More than 50,000 Nvidia chips will power data centres at the National AI Computing Center and facilities owned by South Korean companies like Kakao and Naver. This initiative represents a fundamental shift in how nations approach AI development and data sovereignty.
President Lee Jae Myung said he would prioritise AI investment after coming into office in the face of US tariffs, positioning the country as an ideal place to expand AI infrastructure. According to the Nvidia CEO, South Korea offers crucial advantages: access to energy and land, and the ability to construct factories rapidly. The country is already home to major semiconductor companies and vehicle manufacturers, making it a natural fit for this transformation. This infrastructure development aims to establish the nation as a hub for artificial intelligence innovation in the region.
Market Impact and Future Outlook
Nvidia’s share price was this week further boosted by the announcement, with investors responding positively to the expansion strategy. Hopes of a revival in China sales, following trade talks between Presidents Trump and Xi, also lifted its share price, though concrete outcomes remain uncertain. The value of the South Korean deal was not disclosed, and Mr Huang did not reveal when the projects can be expected to reach full operational capacity.
The deals demonstrate how Nvidia continues to integrate its technology into diverse sectors, from consumer electronics to industrial manufacturing. These partnerships will enable companies to create smarter products and services, fundamentally changing how factories operate. As the AI race accelerates, you can expect Nvidia to remain at the centre of technological transformation, though navigating trade tensions and export restrictions will shape its path forward. The company’s success in maintaining its global standard for AI chips depends on balancing American interests with international market access.
