Nvidia, the prominent U.S. chipmaker, has recently signed an agreement to establish an artificial intelligence (AI) research and development centre in Vietnam, signalling a strategic move in the landscape of tech and semiconductor industries. This development was announced shortly after the U.S. government implemented a semiconductor export control package targeting China, a crucial market for the company.
The agreement, formalised in Hanoi, was attended by Nvidia's founder and CEO, Jensen Huang, and Vietnam's Prime Minister, Pham Minh Chinh. Huang expressed enthusiasm about this initiative, stating, "We are delighted to open Nvidia’s R&D centre to accelerate Vietnam’s AI journey." He outlined the firm's aim to collaborate with a diverse ecosystem of researchers, startups, and enterprises, highlighting the potential for significant AI advancements within Vietnam.
The establishment of the R&D centre is set to enhance an existing AI data centre operated by Viettel Group, a military-owned enterprise that has already integrated Nvidia's technology into its operations. Nvidia's announcement noted that the new centre will create valuable platforms for nurturing AI innovation, providing essential infrastructure for researchers and startups. These entities will utilise the facility to develop AI applications across key sectors, including healthcare, education, transportation, and finance.
This strategic move by Nvidia comes in light of escalating geopolitical tensions between the United States and China. Recently, the U.S. has imposed restrictions on semiconductor exports to 140 Chinese companies, a tactic aimed at limiting China's access to advanced technologies capable of bolstering its military capabilities. Following the U.S. export controls, China has responded by imposing restrictions on the export of critical raw materials to the U.S. and advising local companies against procuring American chips.
Nvidia's business ties with China have been substantial, contributing to approximately 12% of the company's revenue—amounting to around US$3.7 billion—in the July quarter of 2024. This figure represents a more than 30% increase compared to the previous year. Despite this dependence, Huang communicated Nvidia's ongoing commitment to maintaining operations in mainland China while simultaneously exploring opportunities to diversify its presence, with Vietnam being a focal point.
This venture is not an isolated incident for Nvidia. The company has been progressively expanding its partnerships across Southeast Asia. Last year, it entered into a collaboration with FPT Smart Cloud, a Vietnamese AI and cloud computing service provider, to construct a US$200 million AI “factory” outfitted with Nvidia’s graphics chips and software. Beyond Vietnam, Nvidia has solidified alliances and investments in other Southeast Asian nations, including Thailand, Malaysia, Indonesia, and Singapore, underscoring the region's growing importance in Nvidia's strategic framework.
As Nvidia continues to deepen its engagement in Vietnam and the wider Southeast Asian market, the implications for AI and technology development in the region remain substantial, with potential benefits cascading across various industries in the coming years.
Source: Noah Wire Services