Nvidia is putting $3.5 billion into Taiwanese chip designer MediaTek. Under the agreement, MediaTek will integrate Nvidia’s technology to create custom chips tailored for AI companies and hyperscalers, designed to work directly within Nvidia-powered data centers. This move comes as a wave of AI firms and major cloud players—including Amazon, Google, Microsoft, OpenAI, and Anthropic—pour resources into developing their own silicon to reduce dependence on Nvidia’s GPUs. By partnering with MediaTek, Nvidia can accommodate the shift toward custom hardware while preserving its position as the backbone of data center infrastructure. “Nvidia is an AI infrastructure company,” said Dion Harris, Nvidia’s senior director of HPC and AI hyperscaler infrastructure solutions, during a Monday call with reporters. “We expanded beyond pure computing chips years ago.”

This collaboration highlights the cyclical nature of Nvidia’s investment strategy over recent years, which has frequently involved backing companies that ultimately feed back into its ecosystem. The deal grants MediaTek access to Nvidia’s NVLink Fusion ecosystem, which includes NVLink—a technology enabling fast communication between any chips, regardless of whether they’re made by Nvidia. Just last week, Nvidia announced a similar arrangement with Amazon Web Services, though without a direct investment. AWS will add 2 million more Nvidia GPUs to its infrastructure while also adopting NVLink Fusion. Through this partnership, MediaTek can keep producing custom chips designed by cloud providers or AI labs to match their specific workloads, leveraging Nvidia’s “proven scale-up and scale-out technology stack and ecosystem” and “rack-scale architecture.”

“Basically, every cloud, every model builder is deploying our platform in some shape, form, or fashion,” Harris explained. “So by MediaTek being able to offer this extension to its customers, it allows them to standardize on the rack-scale infrastructure across their AI factories… and also deploy their [custom chips] right alongside those using the same standard platform.”

“This is really about opening up this ecosystem to the entire MediaTek customer base,” Harris added. While MediaTek hasn’t disclosed details about its customers in the custom AI chip space, it’s evident Nvidia aims to expand that segment of its business as long as it can benefit from the growth. MediaTek has been steadily developing its data center ASIC (application-specific integrated circuit) operations, stating in June that it expects the unit to bring in $2 billion in revenue by 2026, with plans to capture more of the market going forward. Given MediaTek’s track record in crafting custom chips for smartphones, smart homes, cars, and wireless tech, the company will also keep working with Nvidia on DGX Spark, a compact desktop AI computer aimed at developers. Their collaboration extends to RTX Spark, Nvidia’s initiative to bring AI capabilities to consumer PCs. Additionally, MediaTek and Nvidia will continue “developing platforms for AI-powered, software-defined vehicles in the era of physical AI,” according to a press release. MediaTek’s automotive platforms use Nvidia’s RTX graphics for intelligent vehicle cockpits and pair with Nvidia Drive AGX, the company’s in-car computing system for autonomous driving tasks. “AI is transforming every computing platform—from the world’s largest AI factories to the PC and the car,” said Jensen Huang, founder and CEO of Nvidia, in a statement. “Together, we’re building platforms that bring NVIDIA accelerated computing to new markets and give customers the freedom to create differentiated AI systems at enormous scale.”