'Nvidia Invented the AI Industry': Jensen Huang's 'Dependency Strategy' Embracing South Korea

Do you know who the hottest figure in the country has been recently? It is none other than Nvidia CEO Jensen Huang, who visited South Korea on June 5. Greeting the country by saying he brought a "surprise gift," CEO Jensen Huang literally made a series of bold moves during his five-day stay. As soon as he got off the plane, he rushed to an internet cafe (PC bang) to meet e-sports legend Faker. He also held a so-called "brotherly meeting" over pork belly and soju with SK Chairman Chey Tae-won, LG Chairman Koo Kwang-mo, and Naver Chairman Lee Hae-jin, followed by an appearance on an entertainment show and throwing the ceremonial first pitch at a baseball game. On the final leg of his trip, he visited major domestic companies one after another to strengthen AI alliances and announced cooperation plans in areas such as AI factories and physical AI. He emphasized that he brought potential business worth hundreds of billions of dollars, calling it the largest business gift in South Korean history. Let's unpack the bundle of gifts Jensen Huang left behind.

1. Why Bring the AI Factory Business to South Korea?
The most emphasized aspect of this visit was the "AI Factory" business.

[Jensen Huang / Nvidia CEO: Building AI factories is very important. If it is profitable, anyone would want more AI factories. ]

An AI factory is a next-generation data center for AI. Going beyond traditional data centers that merely serve as storage for vast amounts of data, it uses this data to train AI and perform inference, ultimately creating customized AI to be used in physical systems like robots and self-driving cars. Jensen Huang defines AI factories as essential infrastructure for the AI era and essentially views them as Nvidia's current and future growth engine. Then, why did he bring the AI factory business to South Korea? It is because South Korea is the optimal location to build and operate AI factories. First, AI factories require semiconductors to process massive amounts of power and data. Telecommunication networks are also crucial for fast data processing, and cloud services are needed so that various companies can utilize the AI factories. Ultimately, there must be industries where the customized AI created in these AI factories can be applied. That industry is physical AI. Various forms of physical AI are expected to take root in robotics, mobility, and manufacturing as a whole, and South Korea is a country with the richest manufacturing base where physical AI can be implemented. This is evident just by looking at the companies Jensen Huang met during this visit. SK leads in semiconductors and telecommunications, LG in robotics and data center technology, Hyundai Motor in robotics and mobility, and Naver in cloud services—all of these companies lead industries essential to AI factories. Doosan, where he threw the first pitch, is also a key player in the AI factory alliance through cooperation in power sectors, including physical AI and small modular reactors (SMRs).

[Jensen Huang / Nvidia CEO: From robotics to future AI factories, we are cooperating as one giant team. ]

2. Is It Really a Surprise Gift for South Korea?
So, is the AI factory industry truly a surprise gift? First of all, yes, it is a gift. Simply being able to cooperate on future growth engines with Nvidia, the absolute powerhouse of the AI era, is a major opportunity. South Korean companies will handle key processes for AI factories and may receive priority supplies of Nvidia's GPUs. However, this gift is actually more valuable to Jensen Huang and Nvidia itself. Ultimately, Nvidia's GPUs are essential for AI factories. At a time when U.S. tech giants like Google, Microsoft, and Meta are accelerating the development of their own chips to reduce their reliance on Nvidia, this secures a stable source of revenue. By proposing to build AI factories together, Nvidia has secured future buyers for its GPUs. Although he called it a gift worth hundreds of billions of dollars, the largest share of the fruit goes to Jensen Huang himself. Still, up to this point, it can be seen as a win-win. What is concerning is what comes next.

[Jensen Huang / Nvidia CEO: Nvidia's greatest contribution to South Korea is inventing the AI industry and creating the AI ecosystem. ]

3. What Is Jensen Huang Really After?
What Jensen Huang is targeting is complete dominance over the AI ecosystem by Nvidia. The secret behind Nvidia becoming the world's top company is its ecosystem strategy. Until recently, Nvidia's GPUs and AI chips have been irreplaceable, ensuring that the development of the AI industry directly translates into Nvidia's growth.

[Chang Young-jae / KAIST Professor: Behind Nvidia's growth was such an ecosystem strategy, and in physical AI as well, they want to create their own ecosystem and ultimately lock in (make dependent) others to it.]

With competition in AI chips intensifying recently, Nvidia is preparing yet another ecosystem strategy, this time in physical AI. The goal is to preemptively dominate AI models used in robotics and mobility. To achieve this, data on robots and mobility used in various real-world fields is key. South Korean companies are the ones that can provide this data. By partnering with South Korean physical AI companies, Nvidia aims to train and develop actual models, with the ultimate goal of making Nvidia the standard model for physical AI—such as robotics and mobility—just like Windows for PCs or Android for smartphones. While this is an opportunity for South Korean companies to grow together through cooperation with Nvidia, a leader in AI technology, there is also a clear risk of becoming dependent on Nvidia's ecosystem.

4. What Strategy Does South Korea Need?
A two-track strategy is required. While gaining what we can from Nvidia, we must also focus on independent research and development, such as our own models, to avoid becoming dependent. The day after Jensen Huang left, the South Korean government announced that it would embark on developing independent physical AI technologies. It seems crucial that the government and corporations do not miss this window of opportunity. During his visit to South Korea, CEO Jensen Huang drew massive crowds wherever he went, receiving idol-like attention. In particular, he brought conglomerate chairmen, who rarely appear in public, out to the streets, personally grilled pork belly, clinked beer glasses, and put his arms around their shoulders. Building a friendly image is also evaluated as a highly sophisticated strategy by CEO Jensen Huang. By showing himself enjoying Korean culture and praising South Korea's AI ecosystem, he made cooperation with Nvidia easily acceptable without resistance. While CEO Jensen Huang brought a bundle of gifts to South Korea, we must not forget that behind his friendly image lie Nvidia's economic profits and a fierce survival strategy.

Reported by Jeong Seong-jin | Written by Shin Hee-sook | Video by Jo Chang-hyeon | Edited by Hong Jin-young | Designed by Yang Hye-min | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.