Nvidia Takes on Tariffs with US-Based AI Supercomputer Production
Nvidia's announcement that it will produce AI supercomputers entirely in the US has sparked mixed reactions from industry analysts.
The company said in a blog post that, together with its manufacturing partners, it has commissioned more than one million square feet of manufacturing space to build and test Nvidia Blackwell chips in Arizona, and AI supercomputers in Texas.
Taking on the Tariffs
Scott Bickley, advisory fellow at Info-Tech Research Group, said that the reality of this announcement suggests a migration of chip testing, packaging, and node/rack assembly to the US to take the tariff issue off the table.
He expressed skepticism about Nvidia's job creation prediction, saying that employing robotics and manufacturing automation is likely to kill jobs rather than create them.
Bickley also pointed out that most server assembly work already takes place in Mexico at a lower cost of labor than can be realized in the US.
Nvidia Speaks Out
Patrick Moorhead, founder and chief analyst at Moor Insights & Strategy, said he was waiting for something out of Nvidia, as the company has been quiet on things related to tariffs.
Moorhead noted that Nvidia's plans likely revolve around L11 production, which is the creation of a fully tested system.
He added that some OEMs like Dell Technologies already do L11 in the US, and that the import duties on components coming from Taiwan, China, and Mexico will be the wildcard in this scenario.
Nvidia Blackwell Processors in Production
"Nvidia Blackwell chips have started production at TSMC's chip plants in Phoenix, Arizona," it said. "Nvidia is building supercomputer manufacturing plants in Texas, with Foxconn in Houston, and with Wistron in Dallas."
Industry Experts Weigh In
Forrester Senior Analyst Alvin Nguyen said that Nvidia's plan makes sense in light of the fluid tariff situation.
Nguyen noted that leveraging partners such as Foxconn, Wistron, TSMC, Amcor, and SPIL will help accelerate the development of a US AI server supply chain.
He also predicted that there will be more foundries being built around the world as the push for geographic diversity and supporting supply chains are deployed.