Nvidia Eyes Partnership with India for Chip Development, Targeting Expanding AI Market

According to people familiar with the situation, Nvidia has suggested working with India to develop a chip to capitalize on the country’s robust semiconductor design ability and take advantage of this expanding market.

When Jensen Huang, the founder and CEO of the second-most valuable firm in the world, visited Prime Minister Narendra Modi earlier this year in the United States, he made the request. The company’s value has increased dramatically since Nvidia’s graphics processing unit (GPU) processors are now essential to the artificial intelligence (AI) revolution propelling the IT sector.

According to officials, Nvidia intends to create an India-specific processor by utilizing the vast Indian chip design base. One stated, “The government is currently working out the details, including costing, benefits, and use cases of such a co-developed chip.”

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According to the source, the co-developed chip might be tailored for Indian use cases, such as the Kavach security system used by Indian Railways. According to the person, if the government makes the chip available under the AI mission, Indian entrepreneurs, businesses, and the government can utilize it to enable a variety of apps that might arise.

In a short time, the Santa Clara, California-based company’s market capitalization has surpassed that of Alphabet and Microsoft. With $3.39 trillion, it now lags just slightly behind Apple, the most valuable firm in the world, which is valued at $3.57 trillion.

Later this week, Huang will travel to India for his yearly visit. Huang and PM Modi talked about India’s potential in the field of artificial intelligence during Huang’s visit in September of last year.

According to officials, if a chip is co-developed, Nvidia’s chip design partners, like AMD or Arm, will create the core processor. However, a private chip design company in India or the government-owned Centre for Development of Advanced Computing (C-DAC) can design the top 10–20% layer that is being customized. They claimed that Nvidia’s plan is the result of making good use of India’s vast pool of chip designers.

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Germany and the United States are the only two nations in the world capable of co-developing the technology with Nvidia. According to the person mentioned above, “India is the top choice because of the sheer size of talent available in chip design, which no other country has.”

Data centers and AI-based applications have a lot of room to develop in India, according to Parv Sharma, senior analyst at technology market research firm Counterpoint Research. “Nvidia is already collaborating with Reliance Industries and the Tata Group on AI infrastructure, and it is a major enabler for AI, cloud, and data centers. It will be very beneficial to have a co-developed chip since it will provide silicon for unique use cases in India.

According to Sharma, developing in India entails supply chain risk management, cost-effective silicon, design-related intellectual property (IP), and facilitating the invention of AI businesses. “As the first cloud-based chip designed in India, this will be a major value addition to the India Semiconductor Mission,” he stated.

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Recent research by the Boston Consulting Group (BCG) found that 19% of chip designers worldwide are headquartered in India. The majority of them work in the back offices of the leading chip design companies in the world, which produce the chips elsewhere and then import them to India for usage in a variety of electronics products.

To address this situation, experts have been urging the Indian government to establish a comprehensive ecosystem that includes domestic chip design and production.

Some of the best computer scientists in the world are from India. This is a fantastic chance. After meeting PM Modi in the US earlier this year, Huang stated, “AI is also a new industry, a new manufacturing industry that is very important. To make it feasible, I am looking forward to a profound partnership with India. We have numerous collaborations with India.”

“This is India’s moment,” he added, adding that AI has made computing more accessible. You must take advantage of the chance.