Nvidia to Build $500B AI Plants as Tariff Risks Increase

A $500 billion investment in AI infrastructure has been planned by Nvidia in the United States over the next four years. This plan was announced after Donald Trump repeated warnings about new tariffs on semiconductors made mostly in Taiwan.

The plan was shared soon after Nvidia’s CEO met President Trump at his resort. The chips from Nvidia, which are used to build AI systems, have made the company very valuable in recent years.

To build these chips in the U.S., Nvidia will work with partners to create factories and supercomputers. The actual chipmaking is usually done by companies like Taiwan Semiconductor Manufacturing Company. Last year, Nvidia spent $16.6 billion mainly on making and testing chips.

Production of its new chip, the Blackwell GPU, has started in Arizona. More factories are being built in Houston and Dallas. Full production at these sites is expected within 12 to 15 months.

According to Nvidia’s CEO, making chips in the U.S. will help meet the rising demand for AI, keep the supply chain strong, and improve reliability. The White House called this move “the Trump Effect in action.”

Nvidia's stock value grew over 1,000% since 2020 because of demand for AI chips. But this year, tariff fears caused the stock to fall by 20%, cutting its market value by hundreds of billions.

Global markets rose slightly this week with hopes that Trump might lower some tariffs. Japan and South Korea saw small gains, while China and Hong Kong dropped slightly. In Europe, UK, Germany, and France markets opened higher.

The U.S. government has launched an inquiry into how chip and drug imports affect national security. Chips and drugs were not included in the 10% tariffs that began on April 5, but Trump plans to set new tariffs on imported semiconductors soon.

The U.S. gets many of its chips from Taiwan. Trump placed a 32% tariff on Taiwanese goods, which was paused for 90 days. Earlier, President Biden supported chipmaking in the U.S. with his Chips Act in 2022.

Drug companies are also investing in the U.S. amid tariff threats. Last week, Novartis said it would spend $23 billion to build and grow ten U.S. plants.

📌Source : theguardian