New Chapter in AI Chip Production: Nvidia Plans Expansion in the USA

Nvidia may be on the verge of labeling one of its most eagerly anticipated artificial intelligence (AI) innovations with the "Made in America" seal. Since the launch of the Blackwell AI chip in March 2023, the company has captured the attention of both investors and consumers. Nvidia has captured a significant portion of the AI chip market by supplying numerous companies with the graphics processors (GPUs) needed for their AI models. While the Blackwell chip does not represent Nvidia's first foray into this technology, it does mark a significant advancement in graphics processing technology. Originally manufactured in Taiwan, Nvidia is reportedly in negotiations to shift production to the USA. A new partner could play a crucial role in this, which could have far-reaching implications not only for the companies involved but also for the entire AI sector. Taiwan Semiconductor Manufacturing Company (TSM), a discreet leader in the AI arms race, has made a name for itself as a supplier of chips to technology giants like Nvidia and Apple. TSM produced the first Blackwell chips in Taiwan and may soon begin manufacturing at its factory in Phoenix, Arizona. Despite initial overheating issues in servers, which have since been resolved, experts have no doubts about TSM's manufacturing competence. If Nvidia were to start producing the Blackwell chips in the USA, it would simplify delivery to its large customer list, which includes Microsoft, Oracle, and OpenAI. Elon Musk has announced plans to invest 9 billion dollars in acquiring the necessary Blackwell chips for his new venture xAI. The high demand indicates a significant dependency of the sector on Nvidia's technology. However, with potential U.S. production, costs for buyers could rise, raising the question of how far Nvidia can increase chip prices without losing customers.