Nvidia’s Physical AI Pivot Raises Asian Suppliers’ Share to 90%
Nvidia has shifted to physical AI, boosting Asian supplier involvement to 90% of production costs (up from 65%), driving double-digit gains at LG, Nanya and others. Amazon’s Graviton/Trainium chip spin-out could reach $50 billion revenue, potentially creating competition for Nvidia’s data-center GPU business.
1. Pivot to Physical AI
Nvidia is expanding beyond semiconductors into robotics, autonomous systems and AI-enabled manufacturing, a strategy described by its CEO as the next major wave of artificial intelligence.
2. Asian Supply Chain Surge
Regional partners now account for approximately 90% of Nvidia’s production costs, up from 65% a year ago, triggering double-digit stock gains at LG Electronics (+15%), Nanya Technology (+10%) and Chinese intelligent-driving collaborators.
3. Hyperscaler Capex Drives Demand
Amazon, Microsoft and Alphabet plan nearly $200 billion each in AI spending this year, with Nvidia products representing roughly half of Microsoft’s and a quarter of Amazon’s capital expenditure, fueling additional hardware orders.
4. Potential Competition from Amazon Chips
Amazon’s proposed standalone Graviton and Trainium chip business could hit a $50 billion annual run rate if sold externally, introducing a new rival in data-center accelerator markets.