Special Edition: Nvidia CEO Jensen Huang & MediaTek CEO Rick Tsai Talk New Partnership

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0:44Bloomberg Audio Studios. Podcasts. Radio. News. Welcome to our Bloomberg Television and Bloomberg Radio audiences around the world. We are joined by NVIDIA CEO Jensen Wan and MediaTek CEO Rick Zai, who joins us from Taiwan late in his evening. The idea is you can take custom silicon, right, XPU, and just plug it into any GPU-based architecture, share the memory, the networking. Jensen, could we start with you, please, and just ask you to explain the technology agreement here?

1:15Jensen Huang:Today we're announcing a big partnership. We've already had a big partnership with MediaTek. Today, we're going to make it a lot bigger. It started with us working on recognizing that MediaTek makes the world's best SOCs. And we integrated the NVIDIA NVLink chip-to-chip interface to MediaTek so that whenever there's an SOC for MediaTek, we can connect it to NVIDIA's GPU. And what came out of that first endeavor is this project called DGX Spark. This little computer, this incredible computer, is one petaflops, allows you to run an advanced agentic AI right on your desk instead of having to run it in the cloud.

1:56Jensen Huang:Well, today what we're going to do is we're going to expand our partnership so that we do multiple generations of this. This processor is going to also be the foundation of the revolutionary new computer that's coming from Microsoft and ourselves, a reinvention of the Windows PC for the age of agents. Now, the second thing that we're doing is that MediaTek is incredibly successful building XPUs. And we're going to connect our NVLink Fusion, NVLink system, so that NVIDIA's scale-up NVLink system, which is revolutionized AI, and our Spectrum X switches, our entire networking franchise chassis, system chassis, to MediaTek.

2:39Jensen Huang:So when they win projects, it brings along NVIDIA networking. However, you also know that NVIDIA is already in every cloud and every data center. And so whenever there's a MediaTek XPU, we'll be able to connect it right into that data center in a really seamless way. And then, of course, we're partnering in robotic systems like autonomous vehicles. So you know that AI has revolutionized how we do computing. and we're going to work with MediaTek in all of these different areas. When they win, we have an opportunity to sell a lot more. When we win, they have an opportunity to sell a lot more. Rick, the ASIC customer builds their own accelerator.

3:21They don't need to reinvent the rest of the architecture. But from MediaTek's perspective, Rick, I think it's worth saying, what is the pitch to your ASIC customers on the value of doing this with NVIDIA through NVLink? As I said, thank you for the opportunity. And I also want to really thank NVIDIA and Jensen for having the confidence in MediaTek. And for us, I believe if you look at the whole AI computing stack, all the way from the very top of the

4:01ASIC from the hyperscalers to the mid-end, of the enterprise data centers and new clouds to what Jensen just described, to the desktop supercomputers for the AI applications. You see, I think the collaboration, the partnership we're having with NVIDIA, with our XPU capability, NVIDIA's NVLink Fusion will enable throughout this computing stack customers. The important thing for this era of AI is it's incredibly fast changing. So it's absolutely critical that we can together, we can enable the customers throughout the stack to build the data center, to scale with high speed. Well, as Jensen always like to say, speed of light.

5:02and we work with our customers with tremendous flexibility. So that's part, I think, the essence of the collaboration partnership with NVIDIA. Rick, you had said that your AI chip business would be about$2 billion this year, but would accelerate to get about 15 % of an addressable market of$80 billion next year. Does this arrangement with Jensen and NVIDIA help you accelerate the growth in that business? We certainly expect that to happen, but it will take a little time because we're now getting started building Jensen's latest NVLink version into the chassis that he just mentioned. And I think the chances we'll provide the potential customers with tremendous vehicle to enable a fast time to market.

6:00And that's a key for today's world. Fast time to market. Jensen, you're making a$3.5 billion investment in MediaTek through the purchase of convertible bonds. Why?

6:15Jensen Huang:Well, this is one of the largest partnerships we have. We're building, as I mentioned, multiple generations of edge AI and PC chips. And our chips are GPUs, and they're connected to die-to-die with MediaTek's SOCs. And so they're working with us on multiple generations of SOCs so that we can connect our GPUs to them. This new product line we call DGX Spark and then RTX Spark for PCs is a major investment for us. We have a major commitment to the entire PC industry. And so this partnership expands upon that. This partnership, this investment also formalizes the partnership that we have in building AI factories.

6:59Jensen Huang:As you know, today's AI factories is not just the GPU. It's GPUs and scale-up switches and scale-out switches. The amount of networking necessary, there are five different types of networking necessary to build out an entire factory. Not to mention the NVIDIA Vera CPUs. And so this partnership allows MediaTek to plug directly into that entire AI factory platform. And so wherever we have NVIDIA in the cloud already, which we're in just about every cloud, we now have the opportunity using exactly the same AI factory architecture to plug in MediaTek XPUs. So this is a massive engineering alignment between our two companies.

7:47Jensen Huang:We've been working with MediaTek for a long time. I've known Rick for 25 years. This is a relationship that is really deeply grounded on trust. But we have so much confidence in this partnership that we really wanted to make an investment into MediaTek. Of course, MediaTek is already immensely profitable and they're incredibly successful already. so that the opportunity to be able to make this investment is a great pleasure for us. Jensen, you've already fielded some questions about circular financing, and you and Colette, your CFO on the call, were pretty clear that you see it differently to how the world interprets.

8:22In this case, you are making investment into a partner as opposed to a direct customer. Why is this or is this not circular financing?

8:32Jensen Huang:Well, this is not circular because, obviously, they do their own business and we do our own business. And MediaTek is already incredibly profitable, incredibly successful. They are the world's best SOC maker. They make more SOCs than any company in the world. It's a great pleasure for us to invest in a technology company in Taiwan. It's a great pleasure for us to invest in MediaTek. This is going to turn out, of course, the investment is grounded on a deep partnership that's going to be multiple years. This is a part, the roadmap that we're executing on right now is a, it's not one or two years, it's a decade long.

9:14Jensen Huang:And so this partnership is extremely important to us. And we want to make sure that we have, we demonstrate every opportunity, take every opportunity to demonstrate the importance of it, the seriousness by which we take it, the confidence we have in the partnership and the investment that we're making here demonstrates that. But ultimately, this is going to be a phenomenal investment for us. It's going to generate incredible returns. I have every confidence. Rick, in July, MediaTek said that it would use its bond program,$5 billion of dollar bonds, basically to support and grow supply chain. Earlier in our conversation, you talked about the benefit of working with NVIDIA on NVLink Fusion is speed to market.

9:57What do you plan to do with the proceeds? And when you talk about supply chain, do you need to do more on Taiwanese suppliers or US suppliers in the context of this relationship? I think the certainly, well, back in the end of July, we were not able to discuss the strategic investment part of the bond. So the proceeds, I think, will be for multiple purposes. The supply chain definitely being one of them. And the supply chain is a global, I mean, wherever needed to enhance and enable the customers. But on the other hand, I think, as Jensen said so eloquently, the investment that MediaTek is a tech company, it's a very strong tech company.

10:54And we will definitely invest, if anything, more into the technology in our capability to design, in our capability to make the ASIC chip in the IPs for interconnects, in advanced packaging. I think the key here is really the collaboration agreements that we have built and expanded with Sampvidia, as described in our press release. Those are the key things. The proceeds will basically go in to make those things happen better and further. Jensen, on the earnings call last week, you talked about, with confidence, right, that the GPU-based architecture has superior economics. You were talking about that in the context of the frontier labs, largely because you were asked about custom silicon.

11:49You know, the simple terms of it is that MVLink Fusion just makes it easy to take XPU and just drop it into the data center. That would show that, you know, NVIDIA does see XPU coming into the market. Just the difference of your thinking this week to what you outlined last week.

12:09Jensen Huang:I see XPUs in the market. It's not coming into the market, it's in the market. Look, an XPU is a specialized chip. But NVIDIA's GPU is a general purpose accelerator. We accelerate the entire lifecycle of AI from data processing, which data processing to pre-training to post-training to agentic AI inferencing. We accelerate every single AI model in the world from closed models, every closed model, every open model, video models and language models, biological models and physics models and robotics models. We literally accelerate every single area of AI. That explains why it is that we are the most fungible and the most durable and therefore the most rentable GPU, the most rentable computer infrastructure in the world.

13:06Jensen Huang:We're in every cloud, we're on-prem, we're at the edge. And so we're able to address markets that, frankly, nobody else can because of the architecture of our company and the entire full stack AI factory platform that we have. However, there are customers, and they're very important partners of mine as well, customers of Rix and partners of mine. These are incredibly important to us. If they would like to put a specialized XPU into a data center, why not make it easier for them to connect it to the NVIDIA infrastructure? And so this way, if they would like to build us something, we make it easier for them to build it, and we benefit as well.

13:50Jensen Huang:It makes it easier for everybody involved. And so it's not a question about if one or the other. There's no question NVIDIA's footprint is the largest. There's no question we're growing share in closed models and open models. We're growing share across the entire AI opportunity. And so we're not intimidated by this. We're, in fact, welcoming it and opening our platform so that they could connect XPUs into it. We're live on Bloomberg Television and on Bloomberg Radio, and we're speaking with NVIDIA CEO Jensen Wang and MediaTek CEO Rick Zai, who's joining us from Taiwan late in his evening. Rick, I guess that the answer is no, but is there a case study of an ASIC customer that you can take us through and how you think the ASIC customer is going to respond to this announcement this morning, how they might move in reaction to the idea that MVLink Fusion provides an opportunity for them to move faster?

14:54I think we are engaging with some customers that we are actually kind of a co-go-to-market with our partners, NVIDIA. And I think the announcement today will further strengthen their confidence in the relationship with this strong bond between NVIDIA and the media tech. So they know they can count on if they go for this NVLink Fusion business model. Look, as Jensen said just now, I mean, there are different needs from different customers. And the AI market, computer market is enormous, enormous. So there are different customers needing probably a smaller amount of computing power. but they do want to have some differentiation in their own offering.

15:55And so I think this NVIDIA Fusion, again, will accelerate their go-to-market capability that will be beneficial for them, for NVIDIA and for MediaTek. Jensen, what I find really interesting?

16:09Jensen Huang:In a lot of ways, Ed, this whole thing started because of customer requests. As you know, there are already customers that have committed to NVLink Fusion. Building the XPU is very, very hard, and there's no question about that. And with the partnership with MediaTek, MediaTek can help customers build amazing XPUs. However, inside an AI factory, it includes five different types of networking technology, of course the CPU, and we now make it possible for all of that to come together really easily. And so a lot of customers are asking for this, And they want to access the MVLink technology because it's completely revolutionary.

16:51Jensen Huang:And it's incredibly hard to do when we're in our sixth generation of doing so. And so this is really, really driven by customer request. And I think it makes a lot of sense. And it's great for both of us. Jensen, the part that we haven't talked about is MVHBM. You know, you were pretty clear that the bottleneck is still in memory, pricing and supply. MVHBM, what's the pitch there on what that allows an XPU-based architecture to do? A lot of the specialized inference platforms might be SRAM-based, for example. And I just want to throw this in, Jensen, as I may, because no one's asked you for quite some time.

17:29What's the sort of percentage or proportion of content of the server design NVIDIA is now pushing on its latest Verirubin generation platform? and how that kind of changes in this XPU case study where you have a hybrid AI factory, essentially?

17:45Jensen Huang:Well, inside a gigawatt, if we were just to extrapolate, in a gigawatt, Hopper was about$18 billion of economics for NVIDIA per gigawatt. Grace Blackwell is about 25. And the Vera Rubin generation, It's about$40 plus billion per gigawatt of total NVIDIA compute economics. And the reason for that is because we've been expanding beyond the GPU to one type of switch after another type of networking. And now the amount of chips, there's like seven different types of NVIDIA chips that has to go into an AI factory. An XPU would be a replacement of one of those. You know, my sense is that we'll continue to be in every single cloud, we'll continue to be in every single AI factory.

18:38Jensen Huang:Some of those racks might be augmented with XPUs. And so in those cases, NVIDIA's networking, NVIDIA switching, NVIDIA CPUs would also have an opportunity to participate. And we make it easier for the customers to be able to extend out their AI factory using exactly the same system architecture and networking architecture. In the case of MediaTek, it allows MediaTek to offer an end-to-end solution that is complete. That XPU otherwise would have to go and solve NVLink switching problems, a whole bunch of Nix problems, a whole bunch of Ethernet switching, scale-outs, scale-up. scale across, scale in.

19:23Jensen Huang:There's so many different types of networking technologies that have to come to bear. And we offer the entire thing. So between us and MediaTek, if a customer wants to build XPUs, they now have an entire solution as well. And so our opportunity will continue to grow in these AI factories. Rick, very quickly, what's the biggest bottleneck for MediaTek right now? I think supply chain. does present challenges, you know, not just HVM, go down to substrate, et cetera. But again, being in Taiwan, almost like a center of the AI infrastructure ecosystem, really helps. And we also work closely with NVIDIA, with our customer too.

20:19But it's tough. And I think I don't, I really see those guys in the future.

20:29Jensen Huang:Now NVIDIA's networking ecosystem is now part of MediaTek's supply chain. And MediaTek's XPU is part of our supply chain. And so in a lot of ways, both of us expanded our supply chain in this partnership. And all that, it's early for me. Here we are. I forgot to answer your NVHBM question. Our next generation HBM is a custom HBM. And the HBM stacks are built on a NVIDIA custom base layer. And that base layer, we've extended to our partners, NVLink Fusion partners. And the reason for that is because that NVHBM has to be stacked with the XPU DAI into a COOS package. And that COOS package and the NVHBMs are incredibly complex.

21:23Jensen Huang:And so we've extended that to MediaTek. We've extended it to Amazon as well. And they're one of the first customers and partners building it with us. And so this allows us to aggregate all of our supply chain into something that is much more, if you will, standard. And they'll be able to benefit from our large install base and our large supply chain. And we'll be able to benefit from theirs. NVIDIA CEO Jensen Wang alongside MediaTek CEO Rick Zai. NVIDIA making a$3.5 billion investment into MediaTek and sharing on the data center architecture. Healthcare doesn't always work great. If you've ever waited on a refill or couldn't schedule an appointment, you get it.

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