Nvidia has bought $3.5 billion worth of convertible bonds issued by Taiwan chipmaker MediaTek, sharply expanding cooperation on artificial intelligence (AI) semiconductors. MediaTek plans to adopt Nvidia's NVLink Fusion technology to support connecting customised AI chips to Nvidia-based data centres.

On Aug. 31, local time, Nvidia and MediaTek said they would expand cooperation in AI infrastructure, local AI computing and automotive. Convertible bonds are debt that can be converted into shares under certain conditions. Nvidia will strengthen its technological ties with MediaTek through the investment.

The core of the partnership is applying Nvidia's NVLink Fusion to MediaTek's customised AI chip design business. NVLink Fusion is an interconnect technology that lets Nvidia graphics processing units (GPUs) and chips designed by external companies exchange data at high speed. Nvidia said NVLink provides data transfer speeds more than 10 times faster than typical PCIe 6.0 implementations. Based on the technology, MediaTek will support cloud service companies and AI model developers in connecting their self-designed AI accelerators (XPUs) to Nvidia's NVLink-based rack-level AI infrastructure.

Nvidia's push to embrace the customised AI chip market comes as big tech companies expand development of in-house AI semiconductors. Major companies including Amazon, Google, Microsoft (MS), OpenAI and Anthropic are developing their own chips to reduce reliance on Nvidia GPUs. Nvidia is pursuing a strategy of maintaining its GPU-centered market dominance by supporting connections between customised chips and its AI infrastructure.

Cooperation also continues in personal computing. Nvidia launched the DGX Spark workstation in 2025 for uses including AI model fine-tuning, and the product includes a system-on-chip whose design MediaTek helped develop. The two companies also worked together on the PC processor RTX Spark unveiled in June. They plan to continue cooperation in developing multiple generations of RTX Spark and DGX Spark products.

Automotive is also part of the cooperation. MediaTek supplies the Dimensity Auto system-on-chip that runs in-vehicle displays, and it will continue developing an AI-based software-defined vehicle platform with Nvidia.

Nvidia Chief Executive Jensen Huang (젠슨 황) said, "AI is transforming every computing platform, from the world's largest AI data centers to PCs and cars," and added, "Together with MediaTek, we will expand Nvidia's accelerated computing into new markets and build a platform that enables customers to build differentiated AI systems at scale."

MediaTek is also accelerating expansion of its customised chip business for data centres. MediaTek is targeting $2.0 billion in revenue this year from its data-centre chip design business, and it plans to expand the business by several times over the next few years.

The investment is also seen as an extension of Nvidia's strategy of directly funding semiconductor companies connected to its technology ecosystem. Some investors, however, have raised concerns about "circular financing" over a structure in which Nvidia invests in companies in the AI ecosystem and their products and infrastructure then expand demand for Nvidia technology.

Reuters reported the investment could help Nvidia expand its AI ecosystem while also increasing market attention on the related investment structure.