Nvidia is supplying 260,000 AI chips to South Korea.

Nvidia, a leading semiconductor company in the United States, announced that it will supply more than 260,000 of its cutting-edge artificial intelligence (AI) chips to the South Korean government and some of the country’s largest companies.

This agreement is recorded as a significant step in the global race to integrate artificial intelligence into products and services, while Nvidia reached a market value of $5 trillion on Wednesday, becoming the first company to achieve this milestone.

This development will contribute to South Korea's progress towards becoming a regional AI hub, as the country prioritizes AI investment to promote growth under the leadership of President Lee Jae Myung, who took office on June 4.

Nvidia CEO Jensen Huang stated, "South Korea's physical factories have inspired the world's most sophisticated ships, cars, chips, and electronic products. The country can now produce intelligence, a new export that will drive global transformation." However, he did not provide details on the agreement's value or supply timeline.

This announcement came after Huang met with leaders of Samsung, SK Group, and Hyundai Motor Group at a meeting in the city of Gyeongju, where the Asia-Pacific Economic Cooperation summit was held.

Nvidia is deepening its relationships with key firms in South Korea while navigating the impacts of the Sino-American trade war. Huang noted that the situation had reduced the company’s share in China’s advanced AI chip market.

The U.S. government has continuously restricted the export of Nvidia chips to China on national security grounds. U.S. President Donald Trump met with Chinese counterpart Xi Jinping in South Korea on Thursday but did not bring up this issue.

Nvidia is seeking to increase its advantage in markets less affected by geopolitical issues by identifying applications outside of chatbots and image producers, and setting targets for customers in sectors such as manufacturing and retail.

The South Korean government plans to invest in AI infrastructure using more than 50,000 of Nvidia's state-of-the-art chips. At the same time, Samsung Electronics, SK Group, and Hyundai Motor Group will each distribute 50,000 AI chips for use in smart factories for semiconductor and vehicle production.

The country's largest internet portal and search engine provider, Naver, will also purchase 60,000 Nvidia chips.

With Nvidia chips, the government aims to expand its computing infrastructure through initiatives like the National AI Computing Center, in collaboration with internet companies such as Naver and Kakao.

Hyundai Motor Group plans to deepen its collaboration with Nvidia by building a "supercomputer" to develop in-vehicle AI, autonomous driving, smart factories, and robotics technologies.