Nvidia has secured a substantial AI memory supply from SK Hynix, a deal that could reach $500 billion over several years. This strategic partnership is crucial for Nvidia to meet the escalating demand for its AI processors amidst a global memory shortage.
The agreement also involves the development of new data centers and cloud businesses, with SK Hynix’s affiliate SK Telecom building a cloud service using Nvidia’s advanced systems. The collaboration highlights a massive expansion in AI infrastructure development.
Nvidia Secures Critical AI Memory Supply from SK Hynix in Potential $500 Billion Deal
San Francisco, CA - In a significant move to fortify its dominance in the artificial intelligence sector, Nvidia announced a groundbreaking agreement with South Korean semiconductor giant SK Hynix to secure a vital supply of high-bandwidth memory (HBM). This strategic pact, potentially valued at an astounding $500 billion over several years, aims to alleviate concerns over a global memory shortage and fuel Nvidia's rapidly expanding AI infrastructure.
Jensen Huang, chief executive officer of Nvidia Corp., speaks to members of the media following the company's "Japan AI Ecosystem" reception in Tokyo, Japan, on Thursday, July 16, 2026. (Kiyoshi Ota | Bloomberg | Getty Images)
The deal, revealed late Friday, involves the construction of large-scale data centers slated for completion in 2027. SK Hynix, a recognized leader in HBM production, will be instrumental in providing the essential memory components that power Nvidia's cutting-edge graphics processing units (GPUs) and AI systems. This collaboration underscores the aggressive strategy Nvidia is employing to meet the insatiable demand driven by the AI boom.
A key aspect of the agreement includes SK Hynix affiliate SK Telecom developing a cloud business leveraging Nvidia's Vera Rubin systems. Nvidia anticipates a massive buildout requiring approximately 2 gigawatts of power, translating to hundreds of thousands of GPUs. Raj Mirpuri, Nvidia's enterprise vice president, highlighted the importance of the partnership, stating, "The expansion will include a co-develop opportunity for us on the next-generation SK Hynix AI memory, and this will help us secure a stable supply of HBM memory."
The agreement is indicative of a broader trend where major AI infrastructure development is extending beyond traditional hyperscalers to include foreign governments and large conglomerates. The announcement was made at an AI summit in San Francisco attended by South Korean officials, including President Lee Jae Myung.
In a separate but related move, Nvidia also committed to a $1 billion investment in Naver, a South Korean cloud company, to support its GPU-driven data center projects. This initiative aims to provide potential customers in South Korea and globally with access to AI computing capacity prior to the completion of 200 megawatts of capacity.
SK Hynix's recent listing on the Nasdaq earlier this month is seen as a move to finance such infrastructure developments. The company stands as South Korea's second most valuable enterprise.
This article was originally published on CNBC.com.
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