Vietnamese tech firm teams up with Nvidia for $200M AI factory

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Five months after indicating its intent to invest in Vietnam, chip-making giant Nvidia (NASDAQ: NVDA) has confirmed a partnership to establish an artificial intelligence (AI) chip factory in the Southeast Asian country.

Nvidia will team up with Vietnamese-based IT firm FPT to build the semiconductor plant. Details from the signing of the memorandum of understanding (MoU) between both entities in Hanoi pegs the valuation of the factory at around the $200 million mark.

Upon closer inspection of the details of the MoU, it appears that the partnership will not be entirely limited to chip manufacturing but will operate as a “one-stop shop” for all things AI in Vietnam. The incoming center will serve as a “sovereign cloud” and a research and development hub for AI, cloud capabilities, and other emerging technologies in the region.

Although details are sparse, it appears that FPT will hold a controlling stake in the AI factory, steering its day-to-day operations to meet its company objectives. Since 2021, FPT has been at the forefront of AI development in Vietnam, blazing a trail in the spheres of autonomous driving, generative AI, and AI-based environmental sustainability.

“By accelerating innovation in healthcare, agriculture, climate, manufacturing, and more, AI has the potential to improve lives and strengthen the economies of every nation,” said Keith Strier, Nvidia Vice President of Worldwide AI Initiative. “FPT is working with NVIDIA to empower organizations across Vietnam to drive transformation, helping the country become an AI nation.”

Under the terms of the partnership, Nvidia will provide FPT with its latest suite of AI hardware, including its enterprise software. The new deal confirms FPT’s status as a member of the Nvidia Partner Network as a Service Delivery Partner, but the company is looking to advance its position to Global Systems Integrator.

To achieve the next milestone, Nvidia says it will use available resources to invest in increasing the depth of the local talent pool, targeting universities and high schools. The company aims to equip at least 30,000 students with AI skills in five years via a wave of training programs and setting up new research labs.

Been a long time coming

Nvidia’s decision to wade into Vietnam’s budding market has been in the works since early 2022, underscored by the need to explore the Southeast Asian market. Rattled by simmering tensions with China, the U.S.-based chip manufacturer seized the moment to pursue new partnerships, eyeing Korea and Japan as new hubs.

In late 2023, Nvidia formally signaled its intention to get skin in the game in the Vietnamese ecosystem following a visit by company CEO Jensen Huang to the country.

“Vietnam and Nvidia will deepen our relations, with Viettel, FPT, Vingroup, VNG being the partners Nvidia looks to expand partnership with,” said Nvidia’s CEO Jensen Huang at the time.

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