These Two Tech Giants Announce New ‘AI Factories’

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The world’s biggest chip company Nvidia and the iPhone maker Foxconn are reportedly joining forces to build what they call “AI factories”. The companies say these will be a new kind of data center that will use Nvidia chips to power a “wide range” of applications, including training autonomous vehicles, robotics platforms and large language models.

This collaboration announcement comes as the US announced its plans to cut off more exports of advanced chips to China, in a devastating blow to Nvidia. The latest restrictions announced this week will block sales of two high-end artificial intelligence chips Nvidia created for the Chinese market.

Nvidia’s chief executive Jensen Huang and Foxconn chairman Young Liu spoke together at Foxconn’s annual tech showcase. Huang said that a “new type of manufacturing has emerged – the production of intelligence and the data centers that produce it are AI factories,” and added that Foxconn had the expertise and scale to build these factories globally.

Liu has reportedly explained that Foxconn is trying to convert itself from a manufacturing service company to a platform solution company, citing smart cities and smart manufacturing as other applications for AI factories.

Thanks to the use of the company’s advanced chips in AI applications, Nvidia is currently the fifth publicly traded US company to join the so-called “Trillion dollar club”, along with Apple, Microsoft, Alphabet and Amazon. Foxconn, meanwhile, has been trying to diversify its business and replicate its success in assembling personal computers and smartphones.

Liu has told BBC News in an exclusive interview that electric vehicles EVs are what will drive its growth in the coming decades, and indeed in January Foxconn and Nvidia announced a partnership to develop autonomous vehicle platforms, in which Foxconn would manufacture electronic control units for cars based on Nvidia’s chips.