Nvidia, the global semiconductor giant, has proposed the joint development of a chip with India, leveraging the country’s vast pool of semiconductor design talent and addressing its growing market needs. The proposal was made by Jensen Huang, founder and CEO of Nvidia, during his meeting with Prime Minister Narendra Modi earlier this year in the US, according to sources familiar with the matter. Nvidia is the world’s second most valuable company, with its graphics processing unit (GPU) chips playing a central role in the artificial intelligence (AI) revolution currently transforming the tech industry.
Ashwini Vaishnaw, Union Minister for Electronics and Information Technology, confirmed the development. “Yes, we are discussing with Nvidia the development of an AI chip; discussions are at a preliminary stage,” Vaishnaw told The Economic Times.
According to officials, Nvidia is keen to utilise India’s extensive chip design resources to create a chip tailored to the country’s specific use cases. “The government is currently thrashing out the details such as costing, benefits, and use cases of such a co-developed chip,” said one official.
The proposed co-developed chip could potentially be customised for various Indian applications, including the security system used by Indian Railways, known as Kavach. Additionally, Indian startups, corporations, and government agencies could leverage this chip to support emerging AI-driven applications, especially if it is made available through the government’s AI mission.
While Nvidia has not responded to queries from The Economic Times, the company has experienced significant growth in recent times, with its market cap surpassing $3.39 trillion, making it the second most valuable company globally, just behind Apple’s $3.57 trillion.
Jensen Huang, who is scheduled to visit India later this week, has long seen the potential India holds in AI development. During his visit in September last year, Huang met with Prime Minister Modi to discuss India’s capabilities in the AI space. Recalling the meeting, Huang said, “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?”
The proposed chip development would involve Nvidia’s existing chip design partners, such as Arm or AMD, who would design the core chip. However, the top 10-20% of the chip would be customised by India’s Centre for Development of Advanced Computing (C-DAC) or a private chip design company. “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 one official.
Experts believe that the development of a co-designed AI chip could open significant growth opportunities for India. Parv Sharma, senior analyst at technology market researcher Counterpoint Research, noted, “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 added that designing the chip in India would bring several benefits, including the addition of design-related intellectual property (IP), cost-effective silicon, and support for AI startups, along with enhanced 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 stated.
India’s semiconductor design industry is rapidly expanding, with 19% of the world’s chip designers based in the country, according to a recent Boston Consulting Group (BCG) report. However, these designers primarily work for back-office arms of global firms, with the actual manufacturing of chips taking place elsewhere. As a result, experts have long urged the Indian government to develop an end-to-end ecosystem for indigenous chip design and manufacturing.
“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 said after meeting PM Modi 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.”
He further added, “This is India’s moment. You have to seize the opportunity.”