Shares barely budged as NVIDIA unveiled what CEO Jensen Huang called "half a trillion dollars' worth of business" with South Korea's SK Group — a massive vote of confidence in AI infrastructure buildout whose muted market reaction reflects broader AI spending skepticism. The deal, announced during South Korea's presidential visit to Silicon Valley, pairs the world's dominant AI chipmaker with the country's second-largest conglomerate. For shareholders, the question isn't whether the deal is big — it's whether it's real or aspirational.
The $500 Billion Number Includes Chips NVIDIA Would Sell Anyway. The figure includes money NVIDIA will spend buying memory chips, as well as purchases by SK Group of NVIDIA's supercomputers. "So between us, we're going to do half a trillion dollars' worth of business," Huang said. That framing inflates both sides of a supply relationship into a single headline. The two sides signed letters of intent — not binding contracts — to formalize the agreement. Until purchase orders are inked, the $500B figure represents ambition, not revenue.
Locking In Memory Supply Solves NVIDIA's Biggest Bottleneck. Memory has emerged as one of the critical constraints in AI development; training large models requires moving massive amounts of data between processors and memory.
SK Hynix and Samsung are the two biggest providers of these crucial components — chips in short supply because of the global build-out of AI data centers.
Prior reporting shows NVIDIA paid SK hynix and Micron between $540 million and $770 million each in advance to secure memory allocations — this deal structurally extends that insurance policy. For investors, fewer supply disruptions mean more predictable revenue quarters.
NVIDIA Is Becoming an Infrastructure Investor, Not Just a Chip Seller. Beyond SK Group, NVIDIA will invest $1 billion in Korea's Naver to help finance an AI data center under construction.
That funding will allow Naver to triple its facility from 55 megawatts to 200 megawatts, with Brookfield committing up to $9 billion.
Rather than simply selling chips into a commoditized market, NVIDIA is building deep partnerships that span from silicon to facilities — creating stickier, longer-term revenue streams beyond individual chip sales. The risk: capital deployed into customers' projects ties up cash that could fund buybacks or R&D.
The Market's Flat Response Says Everything. NVDA traded at $206.80, essentially unchanged. Chip stocks sold off broadly as investors questioned AI capital spending sustainability heading into Big Tech earnings. The deal's 2027 operational timeline means revenue impact is at least four quarters away. Shareholders are signaling they need proof — in the form of actual purchase orders and earnings beats — before pricing in another mega-alliance.