In a landmark move, NVIDIA has announced plans to invest up to $500 billion over the next four years to manufacture its advanced AI chips and supercomputers within the United States, marking a significant shift in its production strategy.

This strategic initiative involves partnerships with key industry players to establish manufacturing and testing facilities across Arizona and Texas. NVIDIA has commenced production of its Blackwell AI chips at Taiwan Semiconductor Manufacturing Company's (TSMC) facility in Phoenix, Arizona. Additionally, the company is collaborating with Foxconn in Houston and Wistron in Dallas to build supercomputer manufacturing plants in Texas, with mass production expected to begin within 12 to 15 months. For packaging and testing operations, NVIDIA is partnering with Amkor and Siliconware Precision Industries (SPIL) in Arizona.

This initiative aligns with the objectives of the CHIPS and Science Act, enacted in August 2022, which allocates $52.7 billion to boost domestic semiconductor research and manufacturing in the U.S. By localizing production, NVIDIA aims to strengthen its supply chain resilience and meet the growing global demand for AI technology.

Jensen Huang, founder and CEO of NVIDIA, emphasized the significance of this development, stating, "The engines of the world’s AI infrastructure are being built in the United States for the first time."

The move also reflects efforts to reduce reliance on foreign semiconductor manufacturing, particularly in light of escalating trade tensions and tariffs between the U.S. and China. The Trump administration has imposed steep tariffs on Chinese imports, aiming to boost U.S. manufacturing. In response, China has retaliated with tariffs of its own and has stopped exporting vital rare earth elements to the U.S., disrupting industries dependent on electronics, electric vehicles, and defense components.

Despite strong demand for AI servers, Foxconn, a key supplier for NVIDIA, has downgraded its full-year earnings outlook due to currency fluctuations and uncertainties in U.S. trade and tariff policies. Additionally, NVIDIA has faced challenges due to new U.S. export controls on advanced AI chips, which are expected to cost the company $5.5 billion.

This marks the first time NVIDIA will manufacture its AI chips and supercomputers entirely within the U.S., representing a significant shift from its previous reliance on overseas production facilities.

NVIDIA's substantial investment in U.S.-based AI infrastructure is poised to have a profound impact on the domestic semiconductor industry, potentially creating thousands of high-tech jobs and reinforcing the nation's position as a leader in AI technology.