Nvidia invests $3.5B in MediaTek to extend AI chip ecosystem as Big Tech builds custom silicon

Nvidia is investing $3.5 billion into Taiwanese chipmaker MediaTek, the companies announced Monday. As part of the deal, MediaTek will adopt Nvidia's NVLink Fusion ecosystem — including NVLink, the technology that enables fast communication between chips — to design custom application-specific integrated circuits (ASICs) for AI companies and hyperscalers that can be integrated into Nvidia-based data centers.

The partnership comes as a growing number of AI companies and major cloud providers — including Amazon, Google, Microsoft, OpenAI and Anthropic — invest in building their own chips to reduce reliance on Nvidia's GPUs. By allowing MediaTek to use its interconnect technology, Nvidia can cede ground on custom silicon while maintaining its position as the dominant data center scaffolding provider.

“Nvidia is an AI infrastructure company,” said Dion Harris, Nvidia's senior director of HPC and AI hyperscaler infrastructure solutions, on a call with reporters. “We expanded beyond pure computing chips years ago.”

Harris said the arrangement lets MediaTek's customers “standardize on the rack-scale infrastructure across their AI factories… and also deploy their [custom chips] right alongside those using the same standard platform.” He added that the move is “about opening up this ecosystem to the entire MediaTek customer base.”

MediaTek has been building its custom data center ASIC operations and said in June it expects that business to generate $2 billion in revenue in 2026. The company's expertise in custom chips for smartphones, smart homes, automobiles and wireless communications will also continue to be leveraged through an extended collaboration on Nvidia's DGX Spark, a developer-focused desktop AI computer.

Last week, Nvidia announced a similar partnership with Amazon Web Services, though without a direct investment. AWS will deploy an additional 2 million Nvidia GPUs across its infrastructure and also integrate NVLink Fusion.

Why This Matters

The deal signals Nvidia's strategic pivot: rather than fighting the trend of custom AI chips, it is embedding its interconnect technology into competitors' designs, ensuring its infrastructure remains central.
For MediaTek, the investment provides a major boost to its nascent data center ASIC business, which it aims to grow from $2 billion in 2026 into a larger market share.
For Big Tech firms building custom chips, the partnership offers a path to use Nvidia's proven scale-out infrastructure while still controlling chip design — potentially slowing the drive toward full independence from Nvidia.

Background

Nvidia's GPUs have become the default hardware for training and running large AI models, giving the company enormous influence over the AI supply chain. In response, hyperscalers like Amazon, Google and Microsoft, as well as AI labs like OpenAI and Anthropic, have begun designing their own custom chips to optimize for specific workloads and reduce costs. Nvidia's investment in MediaTek follows a pattern of the chip giant investing in companies that feed back into its own ecosystem, such as previous partnerships with AWS and other cloud providers.

Key Perspectives

Nvidia: By opening its NVLink Fusion ecosystem to third-party chip designers, Nvidia positions itself as the indispensable plumbing layer for AI data centers, even as its own GPU sales face competition from custom silicon.

MediaTek: The Taiwanese chipmaker gains access to Nvidia's market-leading interconnect technology and a $3.5 billion investment, allowing it to scale its custom ASIC business and compete for hyperscaler contracts.

Big Tech firms and AI labs: They gain a ready-made infrastructure platform for their custom chips, but risk deepening their dependence on Nvidia's ecosystem of standards and networking — a trade-off between optimization and lock-in.

What to Watch

MediaTek's reported ASIC revenue: whether it meets or exceeds its $2 billion target for 2026 will indicate demand for the partnership.
Adoption of NVLink Fusion by other custom chip designers, and whether it becomes a de facto standard for AI data center interconnects.
Further investment or partnership announcements from Nvidia with other chipmakers, as the company continues to build out its ecosystem strategy.

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