Nvidia: Nvidia offers to jointly develop chip with India

Nvidia has proposed developing a chip jointly with India, said people familiar with the matter, as the company seeks to leverage India’s strong semiconductor design talent and also tap this growing market.

The proposal was made by Jensen Huang, founder CEO of the world’s second most valuable company, to Prime Minister Narendra Modi when the two met in the US earlier this year. Nvidia’s valuation has surged as its graphics processing unit (GPU) chips have become integral to the artificial intelligence (AI) surge that’s driving the tech industry. Confirming the development, Ashwini Vaishnaw, union minister for electronics and IT, told ET, “Yes, we are discussing with Nvidia the development of an AI chip; discussions are at a preliminary stage.”

Officials said Nvidia wants to use India’s huge chip designing base and develop an India specific chip. “The government is currently thrashing out the details such as costing, benefits, use cases of such a co-developed chip,” one of them said.

Talent hubThe co-developed chip could be customised for Indian use cases, for instance, the Indian Railways’ security system, Kavach, the person said. Also, Indian startups, companies, and the government can use the chip to support various apps which may emerge if the government makes it available under the AI mission, the official added.

Nvidia did not respond to ET’s queries.

The Santa Clara, California-based company has seen its market cap zoom past that of Microsoft and Alphabet in a short period of time. At $3.39 trillion, it is now only marginally behind $3.57 trillion of Apple, the world’s most valuable company.

Huang is visiting India later this week in his annual trip to the country. During his visit in September last year, Huang met PM Modi where both discussed the potential India offers in the world of AI.

“He (Modi) said to me, Jensen, India should not export flour to import bread. This makes perfect sense. Why export the raw material to import the value add? Why export the data of India, so that you can import AI?” Huang said, recalling the meeting.

Officials said in case of a co-developed chip, the core chip will be designed by Nvidia’s chip design partners such as Arm or AMD while the top 10-20% layer, which is being customised, can be designed by government-owned Centre for Development of Advanced Computing (C-DAC) or a private chip design company in India. They said Nvidia’s proposal stems from effectively utilising the large number of chip designers in India.

“There are only two countries in the world who can do this (co-develop the chip with Nvidia), either us or Germany. India is the top choice due to the sheer size of the talent available in chip design, which no other country has,” said the official cited above.

Parv Sharma, senior analyst at technology market researcher Counterpoint Research, said India offers significant opportunities for growth in data centre and AI-based applications. “Nvidia is a key enabler for AI, cloud and data centres, and is already working with Reliance Industries and the Tata Group for AI infrastructure. Having a co-developed chip will be a big win as it will enable silicon for custom use cases in India.”

Sharma said developing in India means adding design-related intellectual property (IP), cost-effective silicon, enabling AI startups’ innovation, and supply chain risk management. “Overall, this will be a key value add to India Semiconductor Mission as it will be the first cloud-based chip to be designed in India,” he said.

According to a recent Boston Consulting Group (BCG) study, 19% of the world’s chip designers are based in India. Most of them possessing highly advanced skills are employed by the back-office arms of the world’s top chip designing firms which manufacture the chips elsewhere which are subsequently imported to India for use in various electronics items.

Experts have been calling on the Indian government to create an end-to-end ecosystem encompassing indigenous chip design and manufacturing to resolve this scenario.

“India is home to some of the world’s greatest computer scientists. This is a great opportunity. AI is also a new industry, a new manufacturing industry that is very important,” Huang had said after meeting PM Modi in the US earlier this year. “I am looking forward to partnering with India in a very deep way to make that possible. We have many partnerships with India.”

AI has democratised computing, he said, adding: “This is India’s moment. You have to seize the opportunity.”