In a major strategic move, Nvidia has announced strengthened alliances with several of South Korea’s industrial giants—Hyundai Motor Group, Samsung Electronics, SK Group (including SK hynix & SK Telecom), and Naver. The deal, revealed at the recent Asia-Pacific Economic Cooperation summit, involves the deployment of over 260,000 of Nvidia’s latest Blackwell GPUs into South Korea’s manufacturing, mobility and cloud sectors.
This isn’t simply a supply agreement—it’s the cornerstone of Korea’s ambition to become a global AI powerhouse. For Nvidia, it marks a bold expansion into markets less constrained by export restrictions and signalling a pivot toward physical-AI infrastructure. In this article, we’ll break down what the partnership entails, why it matters for Korea’s industrial ecosystem, how Nvidia benefits, and what challenges lie ahead.
What the Deals Involve
Massive GPU Deployment
-
The South Korean government, alongside state partners, will deploy roughly 50,000 Blackwell GPUs toward a national AI infrastructure initiative.
-
Each of Hyundai Motor and Samsung Electronics is set to receive around 50,000 GPUs to build “AI factories” where computing, model training, digital twins and manufacturing converge.
-
SK Group (through SK hynix and SK Telecom) will construct its own AI factory and cloud ecosystem powered by Nvidia technology.
-
Naver Cloud is slated to deploy around 60,000 GPUs to expand its enterprise and physical-AI capabilities, including large-language-model development.
Partnership Scope
-
These collaborations span smart-factory automation, autonomous mobility, digital-twin manufacturing, cloud AI training, and sovereign-AI foundations.
-
Samsung’s factory will integrate Nvidia’s software stacks—such as CUDA-X, Omniverse and Nemotron—to enhance chip production, robotics and smart devices.
-
Hyundai’s partnership focuses on mobility: autonomous driving systems, robotics, and next-gen smart factories. Evidence suggests a $3 billion-scale investment.
-
The Korean government views these investments as vital to its strategy to become a top-tier AI export hub, moving beyond traditional manufacturing to “intelligence as an export”.
Why These Moves Matter
For South Korea
South Korea has long been a manufacturing powerhouse—ships, autos, chips. With these agreements, the country is extending that dominance into the AI era. Deploying tens of thousands of GPUs across industries means Korea is laying physical foundations for generative-AI, robotics, autonomous vehicles and smart production at scale.
From a policy perspective, the government’s support ensures investment in sovereign AI infrastructure, reducing dependence on foreign-hosted compute and enabling domestic model development.
For Nvidia
With export restrictions tightening between the U.S. and China, Nvidia is pivoting to other growth regions. By deepening ties with South Korea, the company secures high-volume demand for its Blackwell GPUs, expands its AI-industrial footprint and positions itself as the backbone of physical AI infrastructure—not just cloud compute.
The scale of the announced deployments is large enough to shift Nvidia’s role from hardware vendor to ecosystem partner.
For Industry & Innovation
These are not isolated deals. They represent the convergence of hardware, software, manufacturing and AI innovation:
-
Digital Twins and robotics in semiconductors (Samsung & SK)
-
Autonomous & Mobility AI (Hyundai)
-
Cloud & Enterprise AI Models (Naver)
In short, they show how AI is migrating from “software only” to “industry integrated”.
Implications for Key Sectors
Smart Manufacturing & Semiconductors
Samsung and SK are targeting their factories. By integrating Nvidia’s AI stacks, they can speed design cycles, optimise production and improve yield. For example, SK’s digital-twin initiative aims to simulate entire fab workflows using Nvidia Omniverse and PhysicsNeMo frameworks.
Mobility & Autonomous Systems
Hyundai’s collaboration goes beyond infotainment. The plan involves deploying GPUs, AI training centres and physical AI for in-vehicle systems, robotics and smart factory synergies. The mobility-AI ecosystem is expanding from software to physical compute deployed at scale.
Cloud & Large Language Models (LLMs)
Naver and the Korean government aim to develop foundation models and sovereign AI systems. The GPU infrastructure will allow local model training, likely reducing dependency on foreign AI models and offering tailored Korean-language, industrial-specific AI systems.
What to Watch For (Challenges & Risks)
Supply Chain & Capacity
Deploying over 260,000 GPUs is ambitious. Manufacturing, cooling, power infrastructure and support remain non-trivial. Delays or bottlenecks could affect timelines and cost targets.
Geopolitical & Export Risk
While Korea is outside the current U.S.–China chip-export restrictions, changes in global policy could shift dynamics quickly. Nvidia must manage risk of supply interruption, tariff shifts or regulatory constraints.
Integration Complexity
Building “AI factories” isn’t just hardware. It requires workforce training, software readiness, data pipelines, security protocols, and organisational change. Even Samsung and Hyundai face cultural and operational transformations.
ROI & Monetisation
These are long-term bets. While the infrastructure is enormous, monetising it—through higher yield, faster production, smarter mobility, and new AI-services—is a multi-year journey. Korea will need startups, model-developers and industry to capitalise.
The Broader Trend: Physical AI Infrastructure
Until recently, many AI discussions focused on cloud compute and large language models. These partnerships signal a shift: physical AI infrastructure (factories, mobility, robotics) is now front-and-centre.
In manufacturing, AI-enabled factories symbolise 4th industrial revolution 2.0—where smart machines, digital twins and real-time optimisation converge. In mobility, the race for autonomous vehicles now requires edge compute, model deployment and data centres integrated into vehicles and factories.
Nvidia’s role evolves from being “GPU maker” to “ecosystem builder” in this physical AI era.
Nvidia’s expanded collaboration with South Korean industrial leaders marks a foundational moment in the global AI race. By delivering hundreds of thousands of cutting-edge GPUs and co-building AI factories, Korea is staking a claim to transform “intelligence” into an export just like ships, chips and automobiles before. For Nvidia, it’s a strategic pivot into physical AI infrastructure. For industry, it’s a next-level integration of hardware, software and manufacturing.
The ripple effects will reach far beyond boardrooms. They will shape mobility ecosystems, redefine smart manufacturing, accelerate local AI model development and recast supply-chain power. The countdown to “AI factories” is underway—and Korea, with Nvidia in its corner, aims to move from follower to frontrunner.
Stay tuned: what sounds like a supply deal today may become the blueprint for the next era of AI.
