Nvidia Aims for AI Architecture Dominance with MediaTek Deal

Nvidia is expanding its presence in the AI market beyond just selling custom chips. The company's CEO, Jensen Huang, wants to become the architecture of AI, not just its dominant chipmaker.

In a major move, Nvidia invested $3.5 billion in MediaTek, a Taiwanese chipmaker, which will help customers build custom AI chips that plug into Nvidia's broader systems.

This strategy is part of Nvidia's long-term plan to increase revenue opportunities from its AI-factory power capacity. On its most recent earnings call, the company said its revenue opportunity for each gigawatt of AI-factory power capacity has climbed from roughly $18 billion with Hopper to $25 billion with Grace Blackwell and $40 billion with Vera Rubin.

Nvidia's Vera Rubin combines the company's newest CPU and GPUs with its own networking, memory, and other infrastructure around them. This means Nvidia is selling more of the factory around the GPU, not just the chip itself.

The company has already gained significant traction in this area, partnering with AWS to add 2 million Nvidia GPUs while linking Trainium AI chips more deeply into Nvidia's architecture.