Nvidia has announced a groundbreaking move to supply up to 260,000 of its AI chips to various South Korean entities, including the government, in a significant step towards enhancing the country’s AI infrastructure. This initiative was unveiled at the APEC Summit in South Korea, where Nvidia detailed several agreements with major firms including Samsung, SK Group, Hyundai, and NAVER Cloud.
This new supply chain development will elevate South Korea’s inventory of Nvidia’s AI chips from 65,000 to over 300,000, reflecting a strong commitment to bolstering the nation’s AI capabilities. Nvidia has not disclosed the financial implications of these agreements or the specific timelines for delivery.
The company’s initiative is a crucial component of South Korea’s broader strategy for AI sovereignty, a term that encapsulates nations’ efforts to create their own AI frameworks and reduce reliance on foreign technology. Nvidia anticipates that the sovereign AI market could burgeon to $1.5 trillion in the coming years. This announcement follows a series of significant sovereign AI deals Nvidia secured in the United Arab Emirates, Saudi Arabia, Europe, and the UK over the past year.
Nvidia’s Chief Financial Officer indicated that such sovereign AI agreements could contribute more than $20 billion to its fiscal year 2026 revenue. The push for international AI infrastructure has intensified, especially in light of reduced business opportunities in China due to ongoing trade tensions between the US and China. Analyst Gil Luria from D.A. Davidson pointed out that before 2023, China represented as much as 25% of Nvidia’s market, underscoring the critical need for the company to expand its international reach amidst changing market dynamics.
In alignment with Nvidia’s expansion in South Korea, the nation’s tech leaders—including Samsung, SK Group, and Hyundai—announced plans to establish separate AI factories, each intended to deploy 50,000 GPUs. Furthermore, NAVER Cloud, which operates similarly to cloud giants like Amazon and Google, will enhance its AI infrastructure with an additional 60,000 GPUs.
The Korean government is also playing a proactive role, with its Ministry of Science and ICT planning to procure over 50,000 Nvidia chips for its national AI computing center and in collaboration with IT partners like NHN Cloud and NAVER Cloud. The government aims to utilize Nvidia’s software to create its sovereign AI models, positioning South Korea as a key player in the global AI landscape.