Nvidia Promises to Manufacture AI Chips in the U.S.

Nvidia announced that it has started producing its Blackwell AI computing chips at TSMC’s chip factory in Phoenix, Arizona. The company also plans to expand this production to other factories in Texas, including Foxconn in Houston and Wistron in Dallas. Nvidia stated that “mass production” at these locations will gradually increase over the next 12 to 15 months.
“In the next four years, Nvidia plans to produce AI infrastructure worth up to $500 billion in the United States through partnerships with TSMC, Foxconn, Wistron, Amkor, and SPIL, “Nvidia said in a statement.
Jensen Huang, CEO of Nvidia, said in a statement, “The engine of the world’s AI infrastructure is being built in the United States for the first time. Increasing US manufacturing capabilities will help us better meet the huge and growing demand for AI chips and supercomputers, enhance our supply chain, and improve our resilience.”

Why is this important

The Blackwell chip launched by Nvidia last year is seen as the key to high-performance AI computing, which is becoming increasingly important for the telecommunications industry and the US economy.
Nvidia’s chips may ultimately play an important role in future telecommunications networks. But telecommunications is only one of the industries that may be affected.
Amazon CEO Andy Jassy wrote in a new letter to shareholders, “Generative AI will completely change almost every customer experience we know and enable completely new experiences that we can only imagine.”
Jassy continued, “The early AI workloads being deployed focus on productivity and cost avoidance (such as customer service, business process orchestration, workflow, translation, etc.). This saves companies a lot of money. As AI increasingly changes the norms in areas such as coding, search, shopping, personal assistants, primary healthcare, cancer and drug research, biology, robotics, space, financial services, community networks, etc., you will see changes in these areas. Some of these areas have made rapid progress; others are still in their infancy. However, if your customer experience does not plan to utilize these intelligent models, their ability to query large enterprise datasets and quickly find the information they need, their ability to become smarter with more feedback and data, and their future agency capabilities, you will not be able to maintain competitiveness.”
With the escalation of tensions between China and the United States, the importance of manufacturing AI chipsets in the United States is becoming increasingly prominent, as China has always played an important role in complex manufacturing.

Bring manufacturing back to the United States

Nvidia’s new announcement is the latest step in a trend of transferring some key manufacturing capabilities back to the United States over the years. For example, President Trump boasted during his first term about reaching a $100 billion investment agreement with Taiwan’s TSMC for US chip manufacturing facilities. Subsequently, President Biden signed the Chip Act during his term, allocating $53 billion for chip manufacturers to transfer production to the United States.
This trend is also evident in the telecommunications industry. For example, multiple companies including Adtran, Ciena, Cisco, Nokia, Vecima, and others have worked to strengthen their US manufacturing capabilities to qualify for the US government’s $42 billion Broadband Equity Access and Deployment (BEAD) program.
In the wireless industry, companies including JMA Wireless and Ericsson have built manufacturing plants in the United States, partly to obtain sales orders from the US Department of Defense (DoD).

Tariff chaos

But the timing of Nvidia’s announcement to produce Blackwell chips in the United States may be intentional.
In the past few weeks, Trump has threatened and then revoked massive tariffs on all imported goods, with the goal of expanding domestic manufacturing in the United States. The overall uncertainty caused by this strategy once wiped out the value of $10 trillion in the US stock market. After some tariffs were lifted, the stock market has started to rebound in recent days.
Latest news: Imposing tariffs on Chinese made electronic products seems to be a foregone conclusion, until Trump announces another temporary exemption that may affect smartphones, computers, and other electronic products. If the iPhone can be exempted from major tariffs, Apple executives will undoubtedly breathe a sigh of relief.
Chaos is strategy, “analyst and Moor Insights&Strategy CEO Patrick Moorhead said on social media. He pointed out that Trump’s tariff strategy aims to keep everyone unbalanced.