Nvidia Defends $3.5 Billion MediaTek Deal as Not Circular Financing

Nvidia CEO Jensen Huang recently addressed concerns about the circular financing of his company's deal with MediaTek, saying it is not an example of such a practice.

The $3.5 billion investment in convertible bonds by Nvidia does not give the company equity today but rather debt that can convert later. The release names no conversion price, valuation, or resulting stake.

Nvidia's partnership with MediaTek covers three main areas: adoption of Nvidia's NVLink Fusion, co-development of chips for Nvidia's desktop AI machines, and integration of Nvidia graphics into MediaTek's Dimensity Auto platforms.

Huang emphasized that MediaTek is a profitable and successful company in its own right, selling smartphone, television, and automotive chips to customers unrelated to AI data centers. In contrast, some of Nvidia's previous investments have raised concerns about circular financing.