What the era of 'Sovereign AI' means for chip makers

Nvidia is often thought of as the pre-eminent arms dealer for the artificial-intelligence age.

- Dan Gallagher

Much is riding on the chip maker's not actually being treated like one.

Nvidia and rivals including Broadcom, Marvell and Advanced Micro Devices design the key components that supply the massive computing horsepower required for AI services. They are all recipients of the hundreds of billions of dollars that megacap tech companies based in the U.S. are investing to build those services.

Other countries want in on the action-in a big way. Saudi Arabia recently struck a deal to buy large amounts of Nvidia's AI chips for local infrastructure projects, and Nvidia has described India as a major customer. In addition, Nvidia was named Thursday as a key partner in an OpenAI-led datacenter project in the United Arab Emirates.

"AI is going to be part of a national infrastructure the way telco is part of a national infrastructure," Nvidia Chief Executive Jensen Huang told a meeting of analysts in January.

"Every country has their own telcos." The flip side is that AI chips are now a highly politicized business, figuring prominently in the U.S.-China trade war, and likely many future conflicts to come. For Nvidia and its competitors, that can be a blessing and a curse.