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Nvidia invests $3.5 billion in MediaTek to tie custom AI chips to its ecosystem

Nvidia invests $3.5 billion in MediaTek to tie custom AI chips to its ecosystem

Money Moves

MediaTek adopts Nvidia's NVLink Fusion, giving custom AI chips a path into Nvidia data centers

Yesterday: Nvidia invests $3.5 billion in MediaTek

Overview

Updated 5 hours ago

Nvidia is spending $3.5 billion to help its biggest customers build their own artificial intelligence (AI) chips. The money goes to Taiwanese chip designer MediaTek in exchange for convertible bonds, marking Nvidia's largest direct investment outside the United States.

MediaTek will adopt Nvidia's NVLink Fusion technology, a set of prebuilt connectors and memory for custom AI chips. Those chips plug into Nvidia's rack-scale data centers, large server racks sold as integrated systems. Amazon, Google, Microsoft, and OpenAI have all designed their own chips to reduce reliance on Nvidia's hardware—this deal is Nvidia's way of keeping those chips attached to its ecosystem.

The investment anchors MediaTek's record $3.9 billion overseas bond offering, in which Alphabet also participated. It follows Nvidia's guarantee of up to $105 billion for OpenAI's Ohio data center lease earlier in August. Both deals show Nvidia financing the companies and infrastructure that drive demand for its products.

Why it matters

Even if Amazon, Google, or OpenAI design their own AI chips, Nvidia still earns from the racks those chips plug into.

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Key Indicators

$3.5 billion
Nvidia's investment in MediaTek
Convertible bonds; Nvidia's largest direct investment outside the US.
~90%
Share of MediaTek's bond offering taken by Nvidia
MediaTek's record $3.9 billion overseas offering; Alphabet also participated.
3
Collaboration areas in the expanded deal
AI infrastructure, local AI computing, and automotive.
1.67%
Maximum dilution if all MediaTek bonds convert
MediaTek's estimate for the full offering, not a statement of Nvidia's eventual stake.
$105 billion
Nvidia's guarantee for OpenAI's Ohio data center lease
Announced earlier in August 2026; part of Nvidia's pattern of financing AI demand.

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People Involved

Organizations Involved

Timeline

May 2023 September 2026

5 events Latest: Yesterday
Tap a bar to jump to that date
  1. MediaTek's record bond offering set to price

    Upcoming Finance

    MediaTek's $3.9 billion convertible bond offering issues, with Nvidia taking about 90%.

  2. Nvidia invests $3.5 billion in MediaTek

    Latest Finance

    Nvidia agreed to buy MediaTek convertible bonds; MediaTek adopted Nvidia's NVLink Fusion platform.

  3. Nvidia guarantees OpenAI's Ohio data center lease

    Finance

    Nvidia guaranteed up to $105 billion for the lease, widening its financing ties to AI demand.

  4. Nvidia and MediaTek expand to AI PC chips

    Partnership

    The companies began co-developing PC chips pairing Nvidia GPUs with MediaTek processors.

  5. Nvidia and MediaTek enter automotive partnership

    Partnership

    MediaTek agreed to build automotive systems on Nvidia's Drive platform, their first major collaboration.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

1991-2016

ARM licenses chip designs to rivals (1991-2016)

ARM Holdings designed chip blueprints and licensed them to Apple, Samsung, Qualcomm, and hundreds of other companies. Its partners competed with each other, but every chip they shipped paid ARM a royalty.

Then

ARM's architecture became the standard for mobile phones, powering billions of devices.

Now

SoftBank bought ARM for $32 billion in 2016, showing that owning the standard can be more valuable than selling the product.

Why this matters now

NVLink Fusion is the same play for AI data centers. Nvidia wants every custom chip, even those built by rivals, to rely on its connector standard.

2019-2023

Microsoft invests in OpenAI (2019-2023)

Microsoft invested billions in OpenAI and agreed to host its AI models on Azure. The more successful OpenAI became, the more Azure capacity it consumed.

Then

OpenAI became one of Azure's largest customers, central to Microsoft's AI strategy.

Now

The arrangement set a template for platform companies funding their own demand. Microsoft later loosened the exclusivity as OpenAI sought other compute.

Why this matters now

Nvidia's $105 billion guarantee for OpenAI's Ohio lease follows the same logic, and the MediaTek deal extends it to chip design.

2023

Nvidia backs CoreWeave (2023)

Nvidia invested in CoreWeave, a cloud startup that turned around and bought billions of dollars of Nvidia GPUs to rent to AI companies.

Then

CoreWeave became a major Nvidia customer and a significant cloud provider.

Now

The investment established Nvidia's pattern of financing demand for its own products.

Why this matters now

The MediaTek deal continues that pattern, though Nvidia's chief executive rejects the circularity criticism.

Sources

(8)