Nvidia invests $3.5B in MediaTek; shares rise

Nvidia announced it will purchase $3.5 billion of convertible bonds in Taiwan-based MediaTek, a transaction the companies said will deepen their work on artificial intelligence infrastructure and data-center technology. Nvidia shares rose about 1% on Monday.

The purchase of convertible bonds is Nvidia’s largest direct investment outside the United States. Company officials described the deal as an effort to strengthen collaboration on AI hardware and data-center networking, and to align components and systems used by major cloud and technology firms.

As part of the agreement, MediaTek will adopt Nvidia’s NVLink Fusion and newly disclosed NVHBM technologies. Those tools are designed to improve communication between components inside data centers and to support tighter integration with systems used by large cloud providers.

The expanded technical cooperation covers laptop and cloud products. MediaTek is working with Nvidia on the RTX Spark laptop product. The companies outlined a joint engineering roadmap that they said will extend for a decade.

The two firms also described cross-supply arrangements. MediaTek’s XPU technology will be incorporated into Nvidia’s supply chain, while Nvidia’s networking ecosystem will be offered through MediaTek’s channels.

MediaTek has been shifting its business beyond smartphones and positioning itself as a design partner for companies developing custom AI processors. The Taiwanese firm has existing ties with major technology companies, projects roughly $2 billion in AI chip sales this year and has set a target of capturing about 15% of an $80 billion market segment next year.

The agreement follows recent expansions of cooperation across Nvidia’s customer base. One cloud provider has agreed to deploy an additional two million Nvidia components and to use Nvidia’s connection technology alongside its own internally developed chips. At the same time, several hyperscalers are developing in-house chips to complement or replace some third-party hardware.

Jensen Huang, Nvidia’s chief executive, described the arrangement as a significant expansion of an existing partnership and noted the companies plan a long-term engineering schedule: “We’ve already had a big partnership with MediaTek. Today, we are going to make it a lot bigger.”

Analysts updated valuations after the announcement. Melius Research raised its Nvidia price target to $420 from $400 and kept a Buy rating. The firm also increased its fiscal 2029 earnings-per-share estimate to $21.11 and based the new target on a 20-times multiple of that estimate.

Nvidia’s recent filings show larger capital commitments, mainly tied to memory. Purchase commitments rose to $279 billion from $119 billion, and total commitments reached $366 billion. Nvidia said it plans to return more than 60% of free cash flow to shareholders and expects share buybacks to increase next year.