NVIDIA Invests $3.5B in MediaTek: 10-Year Alliance to Build AI Chips, PC Processors, and Automotive Platforms

US-based NVIDIA has announced a major expansion of its strategic partnership with Taiwanese chip designer MediaTek, investing $3.5 billion in convertible bonds. The deal marks NVIDIA’s largest foreign direct investment to date and kicks off a 10-year program to co-develop custom AI accelerators for data centers, PC processors, and autonomous driving platforms.

Deal Structure: $3.5B in Bonds and Alphabet’s Participation

The funding is part of MediaTek’s record-breaking offshore convertible bond issuance, totaling approximately $3.9 billion. NVIDIA purchased the lion’s share — $3.5 billion — while Alphabet (Google’s parent company) also participated in the remaining portion.

As Reuters reports, the convertible bond structure allows NVIDIA to exchange the debt for a direct stake in MediaTek under certain market conditions. MediaTek remains a fabless designer: joint engineering teams will handle chip design, while TSMC will continue to handle contract manufacturing.

NVLink Fusion: How NVIDIA Maintains Control Over the Custom Chip Market

The deal’s main strategic interest lies in the server segment. Cloud hyperscalers (Amazon, Google, Microsoft, Meta) are increasingly developing their own specialized processors (ASICs and XPUs) to reduce reliance on expensive Blackwell-series GPUs.

Instead of competing head-on, NVIDIA has chosen an infrastructure integration strategy. According to NVIDIA Newsroom, MediaTek will integrate the NVLink Fusion interface and new inter-chip memory technology NVHBM into its custom client chips:

• Third-party ASIC processors designed by MediaTek for major clients will be able to seamlessly join unified compute clusters with NVIDIA racks and switches;
• High-speed interconnect protocols and HBM memory will link third-party processors at the server’s internal bus level.

As TechCrunch notes, Jensen Huang’s plan is pragmatic: even if tech giants ditch some NVIDIA GPUs in favor of their own chips, they’ll still pay the company for NVLink bus licensing, networking gear, and software stack.

Next-Gen PC Processors and Smart Vehicles

In an interview with Bloomberg, NVIDIA CEO Jensen Huang emphasized that the roadmap spans at least ten years and covers three key areas:

1. Custom server silicon: development of SerDes networking chiplets, UCIe packaging standards, and optical interfaces within MediaTek’s data center solutions;
2. AI processors for PCs: advancement of the RTX Spark architecture and GB10 Grace Blackwell superchips (used in compact DGX Spark stations). In this pairing, MediaTek handles energy-efficient ARM cores and overall SoC logic, while NVIDIA integrates GeForce RTX graphics;
3. Automotive platforms: development of highly autonomous vehicle systems for software-defined vehicles, combining the Dimensity Auto chip line with the NVIDIA DRIVE autopilot.

MediaTek Enters the Server ASIC Market

For MediaTek, the alliance means a qualitative business transformation. The company is looking to move beyond smartphone mobile processors and compete directly with Broadcom and Marvell in the server custom chip market.

The company expects to generate over $2 billion in revenue from AI chips in 2026, and by 2027 aims to capture up to 15% of the global data center custom processor market, estimated at $80 billion.

The deal has sparked discussions about “round-tripping” practices, where an industry leader invests in partners that promote its own standards. However, experts acknowledge that the massive agreement forms one of the most powerful tech alliances of the decade, combining MediaTek’s mobile expertise with NVIDIA’s hardware dominance.