The Nvidia South Korea AI partnership marks a major leap for the semiconductor and AI ecosystem in Korea. Nvidia has announced that it will supply more than 260,000 of its advanced Blackwell-series GPUs to the South Korean government and major companies including Samsung, Hyundai, SK and Naver, as part of a sweeping collaboration to build “AI factories” and national AI infrastructure.
This move underscores both South Korea’s ambitions to become a global AI powerhouse and Nvidia’s strategy to deepen its footprint in markets less constrained by U.S.-China trade frictions.
What the Partnership Involves
Here are the key components of the partnership:
- Nvidia will deliver over 260,000 GPUs to South Korea’s government and its top technology/manufacturing firms.
- Breakdown: Samsung, SK and Hyundai will each deploy up to 50,000 GPUs in their factories and AI facilities; Naver Cloud will receive around 60,000 GPUs
- Samsung is set to build an “AI megafactory” integrating Nvidia’s software stack (Omniverse, CUDA-X, cuLitho) to bring AI into its semiconductor manufacturing process.
- Hyundai and Nvidia will co-develop AI capabilities for mobility (autonomous vehicles), smart factories and robotics, with significant investment (approximately $3 billion) supporting a “physical AI” cluster.
- SK Group is building an AI factory with a focus on semiconductor research & cloud infrastructure, leveraging Nvidia’s platforms for digital twin, robotics and manufacturing.
- Naver Cloud will expand its infrastructure for enterprise and physical AI workloads, supporting Korean sovereign AI model development in partnership with Nvidia.
Why This Matters
For South Korea
- The deal positions South Korea as a major “AI factory” hub, not just for manufacturing chips or cars but for building intelligence. Nvidia CEO Jensen Huang said Korea’s manufacturing legacy gives it a strong base to become a regional AI centre.
- The deployments will boost Korea’s sovereign AI capabilities (cloud, infrastructure, models), reducing dependency on external ecosystems.
- For major Korean industrial groups (chips, automotive, internet services), it marks a transition toward embedding AI deeply across manufacturing, mobility, services — not just as an add-on but as core architecture.
For Nvidia
- The partnership helps Nvidia diversify its global exposure, especially amid increasing restrictions on exports to China. South Korea represents a large, technology-capable market with strong manufacturing and ecosystem partners.
- By aligning with top Korean conglomerates, Nvidia embeds its hardware, software (Omniverse, CUDA, etc) and services deeply into multiple verticals (semiconductors, mobility, robotics, cloud).
- The scale (hundreds of thousands of GPUs) signals a major infrastructure shift — not just incremental supply but large-scale factory/infrastructure build-out.
Challenges & Things to Watch
- The successful deployment will depend on integration: simply supplying GPUs is one thing; building factories, AI workflows, data centres and realising ROI is another.
- Supply chain / manufacturing: With so many GPUs in Korea, the demand for supporting infrastructure (power, cooling, network, data, memory) is huge.
- Geopolitics: Nvidia’s ability to sell chips to places like China remains uncertain; its Korea push may reflect strategic hedging. Reuters
- Time to value: These are multi-year projects (some factory builds, cloud infrastructure) — results (e.g., yield improvements, autonomous vehicle roll-outs) may take years.
- Competition & ecosystem risk: Other nations, vendors may also accelerate similar moves; Korea needs to ensure talent, startup ecosystem, regulatory & data-policy environment keep pace.
Background Context
- Nvidia has been a dominant player in the AI hardware market, with its GPUs powering data centres, AI model training and inference worldwide.
- South Korea has long been strong in manufacturing: semiconductors (Samsung, SK Hynix), automotive (Hyundai), internet & services (Naver). This partnership leverages that strength for the next generation of intelligence-driven manufacturing and services.
- The term “AI factory” is increasingly used to describe manufacturing operations where AI (digital twin, predictive control, robotics automation) is embedded at the core, not just as an overlay.
- The global AI/compute race is heating up, especially as nations seek technological sovereignty (avoiding over-dependence on single foreign suppliers, developing domestic AI capabilities).
What This Means For Each Partner
- Samsung Electronics: Building a new AI factory with 50 k GPUs, using Nvidia’s software stack to bring AI into semiconductors, sensors, devices. This could accelerate Samsung’s edge in manufacturing and chip production.
- Hyundai Motor Group: Partnering with Nvidia on mobility, robotics, smart manufacturing. Using 50 k GPUs, $3 b investment, building “physical AI” infrastructure for cars and factories.
- SK Group: Building an AI factory and offering infrastructure (cloud + digital twin) to accelerate manufacturing and industrial transformation in Korea.
- Naver Corporation / Naver Cloud: Expanding GPU infrastructure (~60 k GPUs) to support enterprise AI and sovereign model development in Korea (LLMs, physical AI).
- South Korean Government: Using this partnership to boost national AI computing capacity, build sovereign AI infrastructure, nurture ecosystem (startups, research) and position Korea globally.
Final Thoughts
The Nvidia South Korea AI partnership is a major milestone — both for Korea’s ambition to become a global AI manufacturing & intelligence hub, and for Nvidia’s strategy to embed its compute & software stack deeply across multiple industries in a key partner country.
While execution remains to be seen over the next few years, the scale and scope of the agreement (hundreds of thousands of GPUs, multi-billion dollars of investment, factory transformation) make this one of the most significant corporate-tech partnerships in the AI era.
