Nvidia is committing $3.5 billion to MediaTek by acquiring convertible bonds that can be turned into MediaTek equity, marking Nvidia's largest direct investment to date outside the US. The purchase sits within MediaTek's $3.9 billion dollar-denominated convertible bond sale reported earlier Monday. MediaTek said Alphabet Inc. and other investors also joined the round, without disclosing their individual commitments.
The announcement came via a joint statement and an interview on Bloomberg Television with Nvidia CEO Jensen Huang and MediaTek CEO Rick Tsai. "We've already had a big partnership with MediaTek. Today, we are going to make it a lot bigger," Huang said, calling it "a massive engineering alignment between our two companies." He also said their plan spans the next decade.
MediaTek will align with Nvidia's NVLink platform, adopting NVLink Fusion and the newly introduced NVHBM to improve interoperability inside data centers. The goal is to make MediaTek's technology easier for hyperscalers to plug into existing systems. The two firms will also collaborate on platforms that bring AI into personal computers and automobiles.
"Nvidia's networking ecosystem is now part of MediaTek's supply chain, and MediaTek's XPU is part of our supply chain," Huang said. Addressing investor concerns about circular demand from strategic investments, he added, "This is not circular because obviously they do their own business and we do our own business, and MediaTek is already incredibly profitable, incredibly successful."
The tie-up strengthens Nvidia's push to anchor the future of AI around its hardware standards and interconnects, not just its flagship AI accelerators. MediaTek, for its part, is seeking to take on Broadcom Inc. and Marvell Technology Inc. by helping data center operators develop custom components. Earlier this year, MediaTek reached a deal with Google, bolstering its standing as a design partner for companies building their own AI chips - a change that has led MediaTek's market capitalization to about triple over the past few months.
The MediaTek agreement follows a similar move by Amazon.com Inc., which agreed to roll out 2 million more Nvidia components and to adopt Nvidia's interconnect technology alongside its in-house chips. These arrangements give Nvidia a path to remain central to AI data center build-outs even as customers deploy silicon intended to reduce dependence on Nvidia's core products.
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Nvidia continues to broaden its portfolio - adding full systems and networking to its accelerators derived from graphics processors - and is projecting a 70% jump in sales next year. The company maintains that investments like this speed adoption across the AI ecosystem, where it remains the primary beneficiary of large-scale data center spending.
MediaTek already works with Nvidia on its early laptop initiative, contributing to the RTX Spark product. Asked whether MediaTek's AI chip business will accelerate following the deal, Tsai said, "We expect that to happen but it will take a little bit of time."
MediaTek previously projected about $2 billion in AI chip revenue this year and is aiming for a 15% slice of an $80 billion segment next year. The company has also indicated plans to step up hiring to capture more of the AI opportunity.
