Nvidia absorbed approximately 90% of MediaTek’s $3.9 billion offshore bond offering in Taiwan. The $3.5 billion convertible bond transaction marks the largest bond issuance in Taiwan’s capital market history. In the same offering, Google parent Alphabet also invested, though the size of its investment was not publicly disclosed.
For Nvidia, the $3.5 billion outlay accounts for roughly 3.6% of the $96.2 billion in total revenue reported by the company through the end of July 2026.
Why Zero-Coupon Convertible Bonds
Nvidia entered through zero-coupon bond instruments. Under this structure, MediaTek is not burdened with periodic interest payments to Nvidia, unless the bondholder decides to convert the debt into shares at the agreed strike price. This mechanism unlocks potential equity upside for Nvidia without requiring a direct acquisition of MediaTek.
The deal expands the existing partnership between the two companies across PC, data center, and automotive segments. Under this new collaboration, MediaTek will adopt Nvidia’s NVLink Fusion platform. Their technical collaboration focuses on three pillars: AI infrastructure, edge AI, and software-defined vehicles.
MediaTek’s push to strengthen its chip lineup is also evident outside the Nvidia ecosystem. The Taiwanese company is also helping Google build custom chips, providing Google with a second-source supplier alternative to Broadcom. In the data center market, MediaTek is targeting $2 billion in ASIC chip revenue this year, with the total addressable market estimated to reach $80 billion by 2027. MediaTek management even raised its market share target from 10-15% to 15-20%. MediaTek’s first AI ASIC accelerator chip is scheduled to enter mass production in the fourth quarter of 2026, followed by a second generation in 2028.
Jensen Huang Denies Circular Financing Allegations
Criticism surrounding circular financing practices emerged after the transaction was announced. Observers pointed to a pattern where Nvidia sells chips, finances the buyers of its products, and subsequently reaps capital gains if MediaTek’s stock valuation rises thanks to orders for Nvidia chip components.
Nvidia CEO Jensen Huang firmly denied the circular financing allegations while speaking to Bloomberg TV. Huang stressed that the criticism is unfounded because the two entities operate separate business operations.
For the digital asset and Web3 ecosystem, this multibillion-dollar deal reinforces the foundation of AI and GPU hardware supply - crucial components that also serve as the computational backbone for blockchain networks and crypto mining infrastructure.
The semiconductor competitive landscape is now shifting from simple buy-and-sell transactions of finished components to capital ties and architectural alignment between chipmakers.
Reported by Decrypt.
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Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
