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 AI chips in factories to make everything from robots to autonomous vehicles.
“Just as Korea’s physical factories have inspired the world with sophisticated ships, cars, chips and electronics, the nation can now produce intelligence as a new export that will drive global transformation,” Nvidia’s chief executive Jensen Huang said, days after Nvidia became the first in the world to be valued at $5 trillion.
Mr Huang did not disclose the value of the deal or when the projects can be expected.
Speaking at a CEO summit on the sidelines of Asia Pacific Economic Cooperation (Apec) in Gyeongju, South Korea, Mr Huang added that with the chips, companies would be able to create “digital twins” with other factories around the world.
These deals form part of Nvidia’s latest effort to expand AI infrastructure around the world, to further integrate AI into products and services.
Nvidia has been striking partnerships globally which helped it become the first company ever to be valued at $5tn (£3.8tn) on Wednesday.
South Korea – which is already home to major semiconductor companies and vehicle manufacturers – wants to become a regional AI hub.
President Lee Jae Myung said he would prioritise AI investment after coming into office in the face of US tariffs.
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.
The South Korea deals come as Nvidia grapples with the fallout of the China-US trade war.
China made up for more than a tenth of Nvidia’s revenue last year.
But Huang recently said tensions between the world’s two largest economies had slashed Nvidia’s AI market share in China to virtually zero.
The chip giant is dependent on the tightly knit supply chains that run through the Asia Pacific region.
It is primarily a chip designer, and so outsources most of its physical production to manufacturers like Samsung, SK Hynix and TSMC.
TSMC has been a critical partner for Nvidia, making the company’s most advanced AI chips, including its flagship Blackwell series.
Samsung makes Nvidia’s H20 chips, a scaled-down processor made for the Chinese market under US export rules.
National security experts and some lawmakers 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.
Analysts say that US efforts to block China’s access to advanced computer chips have fostered innovation within China.
Both Huawei and Alibaba have unveiled their own chips that they say can rival Nvidia’s products for the Chinese market.
Beijing has also reportedly prohibited local firms from buying from Nvidia, urging them to buy from Chinese chipmakers to give its domestic tech industry a boost.
Trump said after his meeting with Xi on Thursday that Beijing will hold talks with Nvidia to discuss sales of its chips in China.
Trump said the talks were between China and the US company, but that the US government will play the role of a “referee” of sorts.
Nvidia’s share price was this week further boosted by 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.
Hopes of a revival in China sales, following trade talks between Presidents Trump and Xi, also lifted its share price.
