Nvidia Invests $3.5B in MediaTek to Expand Custom AI Chip Platform

Nvidia deepens AI infrastructure reach with MediaTek investment

Nvidia disclosed Monday it will invest $3.5 billion in MediaTek through a convertible bond, a deal that sent the Taiwanese chipmaker's shares up 10% the following day. The investment caps a remarkable year for MediaTek, whose stock has climbed nearly 200% in 2025.

The core of the partnership involves MediaTek adopting Nvidia's NVLink Fusion platform, which provides the foundational infrastructure for hyperscalers and technology companies to design custom AI accelerator chips that integrate with Nvidia's data center ecosystem. The collaboration also extends to PC and automotive chip development.

Why it matters

As major cloud providers and tech companies increasingly design proprietary AI chips to reduce costs and differentiate their offerings, Nvidia faces potential displacement in the custom silicon market. NVLink Fusion represents a strategic countermove: by providing the connectivity, packaging, and rack-scale integration layer, Nvidia positions itself as essential infrastructure even when customers don't use its flagship GPUs. The MediaTek deal validates this approach and expands Nvidia's influence across multiple chip categories beyond data centers.

What NVLink Fusion provides

The platform bundles NVLink connectivity, high-bandwidth memory, advanced packaging technology, and rack-scale integration into a standardized foundation. This architecture allows chip designers to concentrate engineering resources on differentiated compute capabilities rather than building surrounding infrastructure from scratch. For MediaTek, which currently leads global smartphone chip sales by market share and competes directly with Qualcomm in that segment, the platform offers an entry point into the data center market where Broadcom and Marvell Technology are established players.

MediaTek revealed in June that its custom AI chip division is projected to generate $2 billion in revenue this year, with the broader market opportunity potentially reaching $80 billion by 2027.

Expanding existing collaboration

The companies already work together on Nvidia RTX Spark and DGX Spark chips for consumer and enterprise PCs. MediaTek has also partnered with Nvidia on AI-powered automotive platforms built around its Dimensity Auto product line. Previous collaborations include work with Google and development of the GB10 Grace Blackwell Superchip that powers Nvidia's DGX Spark developer computer.

Nvidia CEO Jensen Huang described MediaTek as "one of the world's great semiconductor companies" in the announcement. MediaTek vice chairman and CEO Rick Tsai said the investment "strengthens a collaboration that spans cloud AI infrastructure, local AI computing and automotive in the era of physical AI."

The investment fits Nvidia's broader pattern of strategic stakes across the AI supply chain, including previous investments in power infrastructure developer Lancium and chip designer Marvell Technology.

These details were first reported by AI Watch.