Jensen Huang identifies the next wave of AI! Asia becomes a key battleground for NVIDIA's physical AI.

According to data compiled by Bloomberg, Asian suppliers now account for approximately 90% of NVIDIA's production costs, up from 65% last year. As demand for NVIDIA products explodes, the company's reliance on Asian partners who dominate manufacturing, assembly, and key components is deepening. Vey-Sern Ling, Managing Director of UBS, stated, "The continued deepening of global technology companies' reliance on Asian supply chains is an inevitable trend." He pointed out that the development of physical AI will further drive up demand for AI chips in Asia, building on existing growth.

In recent years, NVIDIA has continued to expand its lineup of partners in Asia. Previously, it deepened its chip collaborations with suppliers such as SK Hynix and Samsung Electronics, focusing on enhancing AI computing capabilities. However, this latest wave of regional partnerships shows that NVIDIA is extending its reach from semiconductors to the field of physical AI, including robotics. An LG Electronics spokesperson also confirmed that the company recently met with NVIDIA to explore strategic cooperation in the field of physical AI, including a robotics ecosystem.

Bloomberg reports that NVIDIA's foray into physical AI, encompassing robotics, autonomous systems, and AI-enabled manufacturing, extends its influence from chips to real-world deployments, making Asia a key partner in this expansion. NVIDIA CEO Jensen Huang has described physical AI as the next wave after generative AI. Bloomberg Intelligence strategist Marvin Chen stated, "The increasing and expanding demand is creating opportunities for more technology vendors to join the global AI infrastructure supply chain."

Microsoft invests half of its capital expenditure in NVIDIA; AI arms race drives Asian technology supply chain.

The latest capital expenditure guidance from US tech giants shows that AI investment is accelerating: Amazon, Microsoft, and Alphabet have each committed approximately $190 billion to $200 billion this year, while Meta Platforms has also increased its capital expenditure to a maximum of $145 billion. According to Bloomberg calculations, NVIDIA accounts for about half of Microsoft's capital expenditure, a quarter of Amazon's, and also has a high proportion in Meta and Alphabet.

Bloomberg points out that Foxconn continues to play a secondary beneficiary role, particularly benefiting from orders from Microsoft and Amazon, while SK Hynix holds a mid-single-digit share of supply in the major tech giants' supply chains. The surge in demand is also reflected in the financial reports of suppliers; Samsung Electronics' semiconductor division saw a 48-fold increase in profits, exceeding market expectations, and SK Hynix also announced a five-fold year-on-year increase in quarterly profits.

Rajeev De Mello, portfolio manager at Gama Asset Management, said, "Asia's technology infrastructure has a structural advantage, especially as AI creates new demand for semiconductors, components, servers, and overall hardware infrastructure. Asia has accumulated extensive experience and supply chains in building advanced semiconductors and robotics, providing a strong foundation for the implementation of AI in the real world."

Crypto Briefing adds that the market believes NVIDIA's continued expansion of its partnerships in Asia is increasing its chances of becoming the world's most valuable company, reflecting investor confidence in its growth prospects. Going forward, attention should be paid to its Asian expansion, changes in US-China trade relations, financial performance, and regulatory policies, all of which will influence whether NVIDIA can further ascend to the throne of market capitalization.