Foxconn and Nvidia collaborate to create 'AI factories' for self-driving cars  

In a move to construct advanced data centres referred to as ‘AI Factories’, Foxconn, Taiwan's contract electronics manufacturer, and Nvidia, the world's leading chipmaker, have announced an innovative partnership. The collaboration aims to employ Nvidia's cutting-edge chips and software for a range of applications, with a focus on enhancing self-driving car technology. 

According to a Reuters report, Foxconn Chairman Liu Young-way and Nvidia CEO Jensen Huang unveiled this initiative at Foxconn's annual tech showcase in Taipei. The "AI factories" represent a novel paradigm in manufacturing, with the core mission of producing intelligence. "The data centres that produce it are AI factories," Huang said. 

He went on to illustrate the concept with a hand-drawn sketch, highlighting how AI factories will continuously receive and process data from autonomous electric vehicles, thereby making them more intelligent. According to Reuters, he emphasised, "In the future, every company, every industry, will have AI factories." 

Nvidia, a company whose shares have tripled in value in 2023, valued at over $1 trillion, will supply the chips and software for these AI factories. Notably, the new "GH200 superchip," renowned for its advanced capabilities, will play a pivotal role in these facilities. Unfortunately, due to recent export restrictions, Nvidia is unable to sell this superchip in China. 

This announcement follows the revelation that export restrictions will also impact the sales of two high-end AI chips created for the Chinese market, along with one of their top-tier gaming chips. Nvidia's leadership in AI applications has been a key driver behind its market value's meteoric rise. 

Foxconn, a major supplier of Apple's iPhones, aims to replicate its success in assembling personal computers and smartphones by expanding into the production of electric vehicles. Foxconn and Nvidia had previously announced a partnership in January, focusing on developing autonomous vehicle platforms. In this partnership, Foxconn's role involves manufacturing electronic control units (ECUs) for cars based on Nvidia's DRIVE Orin chip for the global market. 

Liu Young-way, standing beside Jensen Huang, affirmed that Foxconn is undergoing a transformation from a manufacturing service company to a platform solution company. The applications for AI factories extend beyond self-driving cars, encompassing smart cities and smart manufacturing. 

As part of its broader push into the electric vehicle sector, Foxconn introduced a new electric cargo van called Model N, marking its sixth prototype. While the company sets ambitious targets for this venture, it has thus far seen limited orders. Reuters cited Jun Seki, the head of Foxconn's EV business, who disclosed discussions with 14 potential customers in a bid to expand into markets such as India and Japan, considered promising for electric vehicle development. 

In the near term, Foxconn aims to capture 5 per cent of the global electric vehicle market, equivalent to $33 billion in revenue from EV manufacturing and components by 2025. However, their long-term vision is even more ambitious: to produce nearly half of the world's electric vehicles. 

Foxconn's Tech Day coincides with the birthday of its founder, Terry Gou, a billionaire who stepped down as the company's chief in 2019. Gou is currently running as an independent candidate for Taiwan's presidential elections in January and was conspicuously absent from the event, in contrast to the previous year when he drove onto the stage in a prototype electric vehicle. 

Foxconn's stock experienced a minor dip of 0.9 per cent on the day of the announcement, in contrast to the broader market's 1.2 per cent decline. 

(With inputs from Reuters) 

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