Nvidia is putting $3.5 billion into MediaTek through a convertible bond deal that pulls MediaTek's custom AI chips onto Nvidia's NVLink Fusion platform, and MediaTek shares jumped 10% on the news.
Read the full story: Nvidia Bets $3.5 Billion on MediaTek to Ride the Custom-Chip Wave →
Transcript
Nvidia just spent $3.5 billion buying into MediaTek, and it's not a simple investment. It's a convertible bond, meaning Nvidia can turn that debt into equity later. In exchange, MediaTek is building its custom AI chips on Nvidia's NVLink Fusion platform, bundling Nvidia's interconnect, memory, and packaging into one stack outside chipmakers can plug straight into. MediaTek shares jumped ten percent on the news. The bigger picture here: Google, Amazon, Meta, and Microsoft are all designing their own AI chips specifically to cut Nvidia out. This deal doesn't stop that trend, it just keeps Nvidia inside it. MediaTek already expects its custom chip business to hit two billion dollars in revenue this year. Nvidia bought itself a seat at that table. It didn't buy the outcome.