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Nvidia (NVDA) may soon be able to stamp ‘made in America’ on one of its most highly anticipated artificial intelligence (AI) innovations.
Ever since Nvidia unveiled the Blackwell AI chip in March 2023, investors and consumers have been highly focused on the company. Until now, Nvidia has successfully cornered much of the AI chip market, supplying many companies with the graphics- processing units they need to continue building their AI models.
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The Blackwell is by no means Nvidia’s first chip, but it represents a significant step forward in graphics-processing technology.
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So far, this crucial new chip has been manufactured in Taiwan before being shipped out. However, Nvidia is reportedly in talks to start building it in the U.S. with the help of a new partner in a deal that would have significant implications for both companies as well as the broader AI sector.
Will Nvidia Blackwell chips be made in America?
If an AI firm is building something in Taiwan, it's more than likely working with Taiwan Semiconductor (TSM) . A quiet leader in the AI arms race, TSM has carved out a niche for itself, supplying chips to big tech leaders such as Nvidia and Apple (AAPL) . After building the first Nvidia Blackwell chips in Taiwan, it is reportedly on the verge of manufacturing them at its factory in Phoenix.
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Given Taiwan Semiconductor’s current partnerships with Nvidia, it makes sense that the AI leader would be exploring a partnership. Despite reports of early Blackwell chips overheating in their servers, experts have confirmed that these issues have been resolved. As such, there is likely no reason to doubt Taiwan Semiconductor’s manufacturing capabilities.
Building the Blackwell chips on U.S. soil would make it easier for Nvidia to ship them to its long list of buyers, which includes Microsoft (MSFT) , Oracle (ORCL) and OpenAI. Elon Musk has discussed plans to spend $9 billion to acquire the Blackwell chips necessary to power the supercomputers his new venture xAI is working on.
The fact that many of the tech sector’s most prominent names rushed to stock up on these new AI chips indicates strong demand and a clear sector-wide reliance on Nvidia’s technology.
But if the company starts building its chips in the U.S., the cost will inevitably rise for buyers. This raises an important question: How high can Nvidia raise its chip prices before clients stop buying?