Nvidia Corp. has secured an artificial intelligence memory supply agreement with South Korea’s SK Hynix that could be worth $500 billion over multiple years, according to an announcement made by the chipmaker late Friday in San Francisco. The deal aims to lock in high-bandwidth memory (HBM) for advanced processors and systems amid a severe global hardware shortage driven by the ongoing AI boom.
Securing High-Bandwidth Memory Supply Amid Global Shortages
The agreement includes plans to construct large-scale data centers expected to come online by 2027, according to Nvidia. To power these facilities, Nvidia is targeting enough capacity to require 2 gigawatts of power, a footprint that signals a buildout of hundreds of thousands of graphics processing units. SK Hynix currently leads the industry in HBM production, according to market analysts.
“The expansion will include a co-develop opportunity for us on the next-generation SK Hynix AI memory, and this will help us secure a stable supply of HBM memory,” said Raj Mirpuri, Nvidia enterprise vice president, during a call with reporters.
Did you know? SK Hynix is South Korea’s second most valuable company and recently listed on the Nasdaq earlier this month to help finance its ongoing infrastructure developments.
Expanding Beyond Hyperscalers Into Global Conglomerates
The new arrangement indicates that massive AI infrastructure buildouts are expanding beyond a small group of traditional hyperscalers, drawing in foreign governments and major international conglomerates. The deal was formally announced at an AI summit in San Francisco attended by South Korean officials, including President Lee Jae Myung.
As part of the broader ecosystem expansion, SK Hynix affiliate SK Telecom will construct a cloud business utilizing Nvidia’s Vera Rubin systems.
Nvidia’s $1 Billion Investment in Naver
In addition to the SK Hynix agreement, Nvidia announced a $1 billion investment into Naver, a South Korean cloud company currently building data centers around Nvidia GPUs. According to Nvidia, this project will allow potential customers in South Korea and worldwide to secure AI computing capacity ahead of the completion of the project’s initial 200 megawatts of capacity.
Frequently Asked Questions
What is the estimated value of Nvidia’s agreement with SK Hynix?
According to Nvidia, the multi-year agreement could be worth up to $500 billion.
What technology will SK Telecom use for its new cloud business?
SK Telecom will build its cloud business utilizing Nvidia’s Vera Rubin systems, according to company announcements.
How much is Nvidia investing in Naver?
Nvidia announced a $1 billion investment into the South Korean cloud company to support GPU-powered data center development.
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