Nvidia-Foxconn bromance raises awkward questions

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By Robyn Mak Jensanity has descended on Taipei – and the feeling may be mutual. The term, used to describe how Nvidia NASDAQ:NVDA boss Jensen Huang is fawned over like a rockstar, was on full display this week while he was in the city for its annual Computex trade show. The $3 trillion tech company's CEO, an American citizen born in Taiwan, reciprocated, spending much of his time talking up the island's indispensable role in global supply chains and artificial intelligence. He also heaped praise on 350 or so local partners. But Nvidia's burgeoning alliance with one of those, Foxconn TWSE:2317, may start attracting unwanted attention from officials in Beijing and Washington.Nvidia already counts Foxconn, formally known as Hon Hai Precision, as a major supplier for its flagship GB200 and GB300 AI servers used in data centres worldwide. The $70 billion contract manufacturer led by Young Liu has bet heavily on cloud computing and networking products as a way to lessen its reliance on top customer Apple NASDAQ:AAPL; earlier this year, Liu even stated that revenue from servers would surpass that of iPhones "within two years".Those ties are set to strengthen. On Monday, the two companies announced they will jointly build a giant AI supercomputer in Taiwan alongside the government and chipmaker TSMC TWSE:2330. Moreover, Liu took the stage to spotlight Nvidia's nascent software, Omniverse, which allows manufacturers to create 3D digital replicas of factories. This, according to Liu, gives Foxconn the wherewithal to plan, stress-test and simulate production lines using AI before deploying them in the real world, for instance. Another promising feature is that companies can train robots using these simulations. For Huang, having the world's largest electronics manufacturer as an early adopter is a powerful proof of concept for Nvidia's ambitions in this sector; he estimates there are currently $5 trillion worth of factories globally under construction.Geopolitics, though, cast a shadow. Foxconn may be from Taiwan, a democratic island which Beijing claims sovereignty over. But it has a huge manufacturing presence in mainland China, which is prioritising self-sufficiency in areas including AI, semiconductors and robotics – capabilities that Washington deems a national security threat. U.S. President Donald Trump's administration has also stepped up scrutiny of U.S.-Ch...

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