Nvidia Corp NVDA is engaged in advanced discussions with Malaysian conglomerate YTL about a data center collaboration, primarily focusing on cloud infrastructure.
The AI kingpin, unfettered by competition, is keen on adding Malaysia to its bouquet of clients after Japan while consolidating its presence in China despite the U.S. embargo.
This potential partnership, likely centered in YTL's data center in Johor, bordering Singapore, aims to expand Nvidia's business footprint in Southeast Asia.
The deal would enable regional businesses to access Nvidia's AI chips through cloud computing.
On a visit to Malaysia, Nvidia CEO Jensen Huang acknowledged YTL's significance in Southeast Asia's computing infrastructure. He expressed enthusiasm about partnering with YTL in any capacity, Reuters reports.
Southeast Asia's growing importance as a technology hub is pivotal for Nvidia, with Huang considering AI infrastructure projects in Singapore or Malaysia and hinting at possible significant investments in Singapore.
Around 15% of Nvidia's revenues, totaling $2.7 billion, came from Singapore in the quarter ending in October, marking a substantial increase from the previous year.
Singapore is a significant hub for U.S. and Chinese tech giants, with over 1,100 AI startups. Huang also mentioned Nvidia's collaboration with 80 startups in Malaysia, indicating the company's expanding involvement in the region's tech landscape.
Nvidia, a leading client of Taiwan Semiconductor Manufacturing Co TSM, continues to drive demand for advanced chips despite TSMC's recent revenue downturn.
The top custom chip supplier reported a 7.5% decrease in November revenue to NT$206 billion ($6.6 billion), with an overall 4.1% drop in the first 11 months of the year to NT$1.99 trillion, Bloomberg reports.
As TSMC grapples with the global chip market's slow recovery, Nvidia's demand for AI chips is a bright spot.
This demand is especially significant for TSMC's advanced production nodes.
The increasing need for AI chips is reshaping market expectations rapidly, with Advanced Micro Devices, Inc AMD, another TSMC client, doubling its AI chip market forecast to over $400 billion in the next four years.
Price Action: NVDA shares closed higher by 2.41% at $465.98 on Thursday.
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