MediaTek Shares Jump 10% After $3.5 Billion Nvidia AI Chip Deal

MediaTek shares surged nearly 10% on Tuesday after the Taiwanese chipmaker announced a major partnership with Nvidia. The deal includes a $3.5 billion investment from Nvidia and could strengthen MediaTek’s position in the fast-growing artificial intelligence chip market.

Nvidia invested $3.5 billion in convertible bonds issued by MediaTek as part of the agreement. The announcement added to MediaTek’s strong performance this year, with its shares already gaining close to 200% since the start of 2026.

MediaTek Shares Jump 10% After $3.5 Billion Nvidia AI Chip Deal

MediaTek is best known for making chips for smartphones and competes directly with Qualcomm in the mobile processor market. However, the company has been expanding beyond smartphones as demand for AI computing continues to grow.

MediaTek Targets the Data Center Market

One of MediaTek’s key growth areas is custom chips for data centers. Major technology companies and cloud providers are increasingly developing their own processors to handle AI workloads. MediaTek wants to become a bigger part of this market by designing customized chips for these customers.

The company could also become a stronger competitor to Broadcom, which currently has a leading position in custom chip development.

Under the new partnership, MediaTek will offer Nvidia’s NVLink Fusion platform to customers building custom AI chips. The technology will allow MediaTek-designed chips to connect with Nvidia’s AI infrastructure.

This could give customers more flexibility while still allowing them to use Nvidia’s wider AI ecosystem. Nvidia, meanwhile, can maintain a role in AI infrastructure even as large technology companies develop more of their own processors.

Partnership Goes Beyond Data Centers

The agreement is not limited to data center chips. Nvidia and MediaTek also plan to work together on local AI computing.

This includes chips for personal computers and technology designed for vehicles. Local AI allows computing tasks to run directly on a device instead of relying entirely on remote data centers.

The partnership could therefore open opportunities for both companies across several markets as AI becomes more common in PCs, cars and other connected devices.

MediaTek Expects Strong AI Chip Growth

MediaTek said in June that its custom AI chip business could generate around $2 billion in revenue during 2026. The company also estimated that the market it can target could reach as much as $80 billion by 2027.

The Nvidia partnership could support those ambitions by giving MediaTek access to Nvidia’s technology and AI ecosystem.

For Nvidia, the investment also strengthens its relationship with a major semiconductor company at a time when the AI chip industry is becoming increasingly competitive.

Nvidia CEO Jensen Huang described MediaTek as one of the world’s leading semiconductor companies in the announcement.

The deal marks another important step in MediaTek’s effort to reduce its dependence on smartphones. If its custom AI chip business continues to grow, the company could become a more significant player in data centers and other AI-focused markets.