Nvidia invests $3.5 billion in MediaTek convertible bonds

Aug 31, 2026

Nvidia is investing $3.5 billion in convertible bonds issued by Taiwan's MediaTek, representing 90% of a record $3.9 billion offering that also drew participation from Alphabet. The deal integrates MediaTek into Nvidia's NVLink Fusion ecosystem, allowing custom AI chips to connect directly to Nvidia data centers. While MediaTek shares surged 10% on the news, the transaction has intensified investor scrutiny regarding circular financing, following Nvidia's previous multi-billion dollar commitments to OpenAI.

Nvidia investment in MediaTek

▪Following the partnership announcement, MediaTek's Taipei-listed shares closed 10% higher on September 1, 2026, adding $20 billion to its market value.
▪Alphabet participated in MediaTek's $3.9 billion convertible bond offering alongside Nvidia, though the size of Alphabet's investment was not disclosed.
▪Nvidia's $3.5 billion purchase represented approximately 90 percent of MediaTek's record $3.9 billion overseas convertible bond offering.
▪Nvidia announced a $3.5 billion investment in convertible bonds issued by Taiwanese chipmaker MediaTek on August 31, 2026.

NVLink Fusion ecosystem expansion

▪Nvidia's NVHBM memory architecture moves the memory controller into the HBM base die, delivering 30 percent greater memory bandwidth than standard HBM4E.
▪MediaTek will integrate Nvidia's NVLink Fusion platform to allow customers to design custom AI chips that connect directly to Nvidia-powered data centers.
▪Nvidia and MediaTek are extending their collaboration on AI chips for personal computers, including the RTX Spark platform, and software-defined vehicle systems.
▪Nvidia's NVLink-C2C chip-to-chip interconnect provides up to 300 gigabytes per second of bidirectional bandwidth to connect custom CPUs to Nvidia GPUs.

Circular financing scrutiny

▪Nvidia CEO Jensen Huang disputed circular financing concerns, stating that MediaTek and Nvidia operate independent businesses.
▪Nvidia's MediaTek deal follows a $30 billion investment in OpenAI in February 2026 and a $105 billion guarantee for OpenAI's Ohio data center in August 2026.
▪Nvidia's $3.5 billion MediaTek investment drew scrutiny from analysts and investors who argue it represents a pattern of circular financing in the AI sector.

MediaTek data center diversification

▪MediaTek projected its custom AI chip business would generate $2 billion in revenue in 2026, targeting up to 15 percent of an $80 billion market segment.
▪MediaTek's expansion into custom data center chips is backed by a $5 billion financing plan approved by the company in July 2026.
▪MediaTek is diversifying beyond its core smartphone chip business by designing custom integrated circuits and accelerators for AI data centers.

Big Tech custom chip development

▪Major cloud providers and AI developers, including Amazon, Google, and Microsoft, are increasingly designing their own custom processors to reduce reliance on Nvidia.
▪Amazon Web Services partnered with Nvidia to deploy 2 million additional graphics processors and integrate NVLink Fusion technology with its in-house chips.