Nvidia’s Physical AI Costs Jump to 90%; Amazon Plans $50B Chip Division
Nvidia’s shift into physical AI boosted Asian suppliers’ share of its production costs from 65% to 90%, propelling LG Electronics and Nanya Technology shares up 15% and 10% respectively. Amazon may launch a standalone chip division selling Graviton and Trainium chips, targeting $50 billion revenue and intensifying competition with Nvidia.
1. Nvidia’s Physical AI Strategic Shift
Nvidia has expanded beyond core semiconductor design into physical AI applications including robotics, autonomous systems and AI-enabled manufacturing, a move CEO Jensen Huang frames as the next major wave of artificial intelligence deployment.
2. Surge in Asian Supplier Costs and Stock Gains
Asian manufacturers now account for roughly 90% of Nvidia’s production costs, up from about 65% last year, driving double-digit share increases in key partners such as LG Electronics (15%), Nanya Technology (10%), Huizhou Desay SV Automotive and Pateo Connect as they roll out AI-enabled solutions.
3. Amazon’s Standalone Chip Division Intensifies Competition
Amazon is poised to create a standalone chip division to sell its Graviton and Trainium processors externally, aiming for $50 billion in revenue—a strategy modeled on Nvidia’s external sales approach that could reshape competitive dynamics in the AI chip market.