Nvidia Invests $3.5 Billion in MediaTek to Boost AI Data-Centre Chip Collaboration

Nvidia is putting $3.5 billion into convertible bonds issued by MediaTek, the Taiwanese chipmaker behind much of the world's Android phones, as part of a deal that ties MediaTek's push into AI data-center chips to Nvidia's own interconnect technology. The companies announced the deal in a joint statement Aug. 31, with continued pickup on financial wires into Sept. 1.

The bonds are part of a $3.9 billion overseas convertible offering — MediaTek's largest ever, and what the company called the biggest such issuance in Taiwan's capital-market history. Alphabet also put money into the offering; the size of its stake was not disclosed.

Under the agreement, MediaTek will adopt Nvidia's NVLink Fusion, the interconnect platform that lets outside chipmakers build custom AI accelerators, known as XPUs, that plug directly into Nvidia's rack-scale systems. MediaTek has been designing custom chips for data-center customers including Alphabet's Google, positioning it as a potential rival to Broadcom and Marvell in that market.

Rather than compete with that ambition, Nvidia is financing it. The bonds convert into MediaTek shares only if the stock passes a set conversion price; until then, Nvidia holds debt, not equity. "Nvidia's networking ecosystem is now part of MediaTek's supply chain, and MediaTek's XPU is part of our supply chain," Nvidia CEO Jensen Huang said in the joint statement.

The move follows a similar deal Nvidia struck with Amazon, which agreed to deploy an additional 2 million Nvidia components and adopt Nvidia's interconnect technology for its in-house chips.

MediaTek shares jumped about 10% on the news, extending a rally that has nearly tripled the company's market value this year. Many of the Android phones sold in Hong Kong run on MediaTek chips, giving the deal a direct line into the city's handset market even though it was struck in Taiwan and California.

Neither company has disclosed the bonds' maturity date or full conversion terms, details investors are expected to press for as MediaTek's design wins with hyperscalers come up for review in the months ahead.