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Nvidia Partners with Foxconn to Establish AI Factories

AI factory
Nvidia collaborates with Foxconn to build AI factories, navigating US export challenges while charting new growth in artificial intelligence infrastructure.

In a significant move towards advancing artificial intelligence infrastructure, Nvidia, the world’s leading chip manufacturer, is collaborating with iPhone producer Foxconn to construct “AI factories.” These unique data centres, equipped with Nvidia’s cutting-edge chips, will support a broad spectrum of applications, from training autonomous vehicles and robotics platforms to powering expansive language models.

US Export Restrictions Impact Nvidia

This development comes at a challenging time for Nvidia, as the US recently declared intentions to further restrict exports of sophisticated chips to China. This decision directly affects Nvidia, as Washington’s recent directives will prohibit sales of two of their high-end AI chips specifically designed for the Chinese market – the A800 and H800.

During Foxconn’s annual tech showcase held in Taipei this Wednesday, Nvidia’s CEO, Jensen Huang, and Foxconn’s Chairman, Young Liu, jointly addressed the audience. Mr. Huang highlighted the evolution of manufacturing, emphasizing the rise of “AI factories” responsible for producing intelligence. He remarked on Foxconn’s unparalleled expertise and capability to establish these factories on a global scale.

Foxconn and Nvidia

On the other hand, Mr. Liu discussed Foxconn’s strategic shift from being primarily a manufacturing service enterprise to a comprehensive platform solution provider. He mentioned smart cities and advanced manufacturing as potential areas where AI factories could be pivotal.

Nvidia’s proactive engagement in AI applications has substantially bolstered its market position. The company’s stock value has soared, making it a member of the prestigious “Trillion dollar club” alongside corporate giants such as Apple, Microsoft, Alphabet, and Amazon. This year alone, Nvidia shares witnessed a threefold increase, elevating its market capitalization beyond $1 trillion.

Foxconn, recognized for producing over half of the world’s Apple gadgets, is actively exploring avenues to diversify its portfolio. Building on its legacy in assembling personal computers and smartphones, the company is looking to redefine its business model. In a candid interview earlier this year, Mr. Liu expressed confidence in electric vehicles being the primary growth catalyst for Foxconn in the upcoming decades.

Earlier this year, both Foxconn and Nvidia had made public their intention to collaborate on autonomous vehicle platforms, marking a significant step in their joint ventures in AI technology.

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