MediaTek shares rise 10% after $3.5 billion deal with Nvidia
Shares of Taiwanese chipmaker MediaTek closed up 10% on Tuesday after the announcement of a partnership with Nvidia. Under the deal, Nvidia invested $3.5 billion in MediaTek convertible bonds. The news also supported the development of MediaTek's data center business, CNBC Top News reports.
The companies announced the agreement on Monday. Since the beginning of the year, MediaTek shares have risen by nearly 200%, CNBC notes.
Integration of AI chips
MediaTek will offer Nvidia's NVLink Fusion platform to customers developing specialized artificial intelligence chips. This will allow semiconductors created by MediaTek to be integrated with Nvidia's AI infrastructure and systems.
NVLink Fusion is part of Nvidia's strategy to retain an important role in artificial intelligence infrastructure. Companies are increasingly developing their own chips to perform specific AI tasks, and the platform is intended to help integrate such solutions with Nvidia technologies.
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Development of MediaTek's business
According to Counterpoint Research, MediaTek has the largest share of the global smartphone chip market and is the main competitor of U.S.-based Qualcomm. Recently, the Taiwanese company has also been developing specialized chips for data centers.
Major cloud providers and other technology companies are increasingly ordering their own chips for AI workloads. CNBC notes that MediaTek is becoming one of the manufacturers capable of creating such solutions and could potentially challenge Broadcom, which is the leader in this market.
The companies also plan to cooperate in local AI computing, including on chips for personal computers and systems for vehicles. In June, MediaTek forecast that its specialized AI chip business would generate $2 billion in revenue this year, while the total addressable market could reach $80 billion by 2027.
Nvidia CEO Jensen Huang called MediaTek one of the world's leading semiconductor companies in a press release.
