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Nvidia secures major AI chip deal with South Korea amid global expansion
Nvidia will deliver over 260,000 of its most advanced artificial intelligence chips to South Korea's government and major corporations-including Samsung, LG, and Hyundai-the company announced Friday. The chips will power factories producing semiconductors, robotics, and autonomous vehicles, marking a strategic push to integrate AI into industrial infrastructure, CEO Jensen Huang said during a summit at the Asia-Pacific Economic Cooperation (APEC) forum in Gyeongju.
Huang framed the agreement as a milestone for South Korea's technological ambitions, stating the country could now "produce intelligence as a new export." Financial terms of the deals were not disclosed. The partnership aligns with Seoul's goal to establish itself as a regional AI hub, leveraging its energy resources, available land, and manufacturing capabilities to build "sovereign AI" infrastructure under government control.
Expansion amid US-China trade tensions
The South Korea deal follows a week of high-profile developments for Nvidia, which on Wednesday became the first company to reach a $5 trillion valuation. The announcement also comes as the firm navigates ongoing fallout from US-China trade restrictions, which have severely limited its access to the Chinese market-a sector that once accounted for over 10% of its revenue.
"We used to have 95% share of the AI business in China. Now we're at 0%," Huang lamented during the APEC summit, calling the situation "disappointing." His comments arrived a day after former US President Donald Trump indicated that Beijing would enter talks with Nvidia to discuss resuming chip sales, with the US government acting as a "referee" in the process. Huang expressed hope for policy changes that could restore market access, arguing that "it's in the best interest of America to have the China market-and in China's interest to have an American company bring technology to the country."
"We'd like to see American technology be the global standard."
Jensen Huang, CEO, Nvidia
South Korea's AI infrastructure push
Under the agreement, more than 50,000 Nvidia chips will equip data centers at South Korea's National AI Computing Center, as well as facilities operated by domestic tech giants Kakao and Naver. The initiative reflects President Lee Jae-myung's priority to accelerate AI investment, particularly as the country faces pressure from US tariffs on semiconductor exports.
Huang emphasized that the chips would enable companies to create "digital twins"-virtual replicas of physical factories-to optimize global production networks. The deal underscores Nvidia's reliance on Asia-Pacific supply chains, including partnerships with manufacturers like TSMC (which produces its flagship Blackwell chips) and Samsung (which supplies components for its China-compliant H20 processors).
Geopolitical and competitive pressures
Nvidia's expansion in South Korea coincides with rising competition from Chinese firms. Beijing has reportedly restricted local companies from purchasing Nvidia chips, instead promoting domestic alternatives from Huawei and Alibaba. US national security officials have long warned that advanced AI chips could bolster China's military capabilities, though Huang struck a diplomatic tone: "We respect deeply the capabilities of China."
The company's stock surge this week was further fueled by new partnerships with the US Department of Energy, Nokia, Uber, and Stellantis-deals designed to reassure investors of AI's long-term profitability. Analysts note that US export controls have inadvertently spurred innovation in China's chip industry, with local firms now marketing Nvidia rivals tailored for the domestic market.
What's next
Nvidia's immediate focus remains on finalizing discussions with Chinese authorities, though Huang acknowledged that any resumption of sales-particularly for its cutting-edge Blackwell chips-would require US presidential approval. The outcome of trade talks between Washington and Beijing, he suggested, could reshape the global AI landscape.
