Nvidia shares rose nearly 1% on Monday after the company announced a $3.5 billion investment in Taiwan-based MediaTek, deepening an existing partnership focused on artificial intelligence infrastructure and data-center technology. Under the agreement, Nvidia will purchase bonds convertible into MediaTek shares, marking its largest direct investment outside the United States.
The expanded collaboration will see MediaTek adopt Nvidia’s NVLink Fusion and newly announced NVHBM technologies, which are designed to improve communication between components inside data centers. This integration allows MediaTek’s custom silicon to work more closely with systems operated by major cloud and technology companies.
Nvidia CEO Jensen Huang called the deal a significant expansion of an existing relationship, telling Bloomberg Television: “We’ve already had a big partnership with MediaTek. Today, we are going to make it a lot bigger.” He added that the companies’ engineering roadmap extends for a decade.
MediaTek is seeking to reduce its reliance on the smartphone market and is positioning itself as a design partner for large technology companies developing custom AI processors. The Taiwanese company has forecast AI chip sales of about $2 billion this year and is targeting a 15% share of an $80 billion segment next year. The investment follows a similar expansion of cooperation with Amazon, which agreed to deploy an additional 2 million Nvidia components and use Nvidia’s connection technology with its internally developed chips.
Nvidia continues to forecast sales growth of more than 70% next year. Melius Research raised its Nvidia price target to $420 from $400 and maintained a Buy rating, while highlighting Nvidia’s purchase commitments increasing to $279 billion from $119 billion and total commitments reaching $366 billion.
