Nvidia just wrote its largest check outside the United States: $3.5 billion to purchase MediaTek convertible bonds, in a deal announced on September 1. This investment covers roughly 90% of MediaTek’s $3.9 billion offshore bond offering, which MediaTek described as the largest in the history of Taiwan’s capital markets. Alphabet, Google’s parent company, also participated but did not disclose the amount. MediaTek’s shares hit the 10% daily upper limit during trading in Taipei.
In essence, Nvidia bought zero-coupon bonds, meaning MediaTek pays no interest unless bondholders convert at a predetermined price. Nvidia stands to benefit if MediaTek’s stock continues to rise without needing an outright acquisition. Jensen Huang told Bloomberg TV that this is not circular financing because the two companies operate separate businesses. However, critics argue this is precisely a form of circular financing: Nvidia sells chips, funds the buyer, and then profits further if the buyer’s stock rises as a result of purchasing more chips. The $3.5 billion investment represents approximately 3.6% of the $96.2 billion in revenue Nvidia reported for the quarter ending in late July.
The transaction deepens a partnership that already touches PCs, data centers, and automotive systems. MediaTek will adopt Nvidia’s NVLink Fusion platform, which allows custom chips to be connected directly into rack-scale computing systems. Three focal areas were highlighted: AI infrastructure, edge AI, and software-defined vehicles. In the edge segment, the two companies continue to develop RTX Spark and DGX Spark chips for AI PCs and workstations.
An intriguing aspect lies in MediaTek’s ASIC ambitions. The company is racing to build its custom AI accelerator chip business, expecting to surpass $2 billion in revenue this year, with an addressable market of $80 billion by 2027 and a target market share of 15-20%, up from a previous 10-15%. MediaTek has also quietly assisted Google in developing proprietary silicon, establishing a second option alongside Broadcom, which previously helped Google build TPUs and manufactured the Jalapeño chip for OpenAI.
The big picture: Nvidia’s bet embeds the world’s most valuable chipmaker deep inside a major tier-two ASIC designer, just as its largest customers seek to reduce their reliance on Nvidia GPUs. MediaTek’s first AI acceleration ASIC is slated for mass production in Q4 2026, with the second generation planned for large-scale rollout in 2028.