NVIDIA PUTS TAIWAN AT CENTER OF AI ECONOMY AND CHIP SECURITY

Nvidia CEO Jensen Huang said Wednesday that the company plans to spend about $150 billion a year in Taiwan, calling the island the “epicentre” of the AI revolution. Reuters reported that Huang made the remarks in Taipei during a launch event for Nvidia’s future Taiwan headquarters, which is expected to break ground this year and become operational by 2030.

The scale of the planned spending reflects Taiwan’s central role in the global AI supply chain. Nvidia depends on a network of Taiwanese manufacturing partners, including TSMC, Foxconn, Wistron, and Quanta Computer, for advanced chips, servers, and AI infrastructure. Huang said Nvidia’s annual spending in Taiwan has risen sharply from roughly $10 billion to $15 billion several years ago to around $100 billion today, with plans to rise toward $150 billion.

That makes the announcement both an economic story and a security story. Taiwan is a democratic island that Beijing claims as its own territory, while Taiwan’s government rejects China’s sovereignty claim. Reuters reported this week that Taiwan sent ships and fighter jets to monitor a second Chinese “joint combat readiness patrol” near the island within a week, after detecting 21 Chinese aircraft, including J-16 fighters and drones, operating with Chinese warships around Taiwan.

Taiwan’s government has repeatedly framed China’s military activity as a regional stability threat. Reuters reported last week that Taiwan’s premier called China’s ongoing military actions the greatest source of regional unease and instability, as Chinese naval and air activity continued around Taiwan and in the western Pacific.

The security concern is not only invasion risk. Taiwan’s semiconductor ecosystem is now tied to export controls, industrial espionage, sanctions enforcement, and U.S.-China technology competition. Reuters separately reported Wednesday, citing Bloomberg News, that Taiwanese prosecutors suspect Nvidia chips may have been smuggled to China through Japan. Reuters said it could not independently verify the Bloomberg report, but the allegation shows why AI chips are now treated as strategic goods rather than ordinary commercial products.

The United States is also trying to reduce some dependence on Taiwan-based production. Reuters reported that TSMC, the world’s largest contract chipmaker and a major supplier to companies including Nvidia, is investing $165 billion to build manufacturing facilities in Arizona. At the same time, Taiwan’s government has pushed back against claims that it “stole” the U.S. chip industry, emphasizing cooperation with Washington and the importance of Taiwan’s semiconductor development.

Nvidia’s announcement therefore cuts two ways. It strengthens Taiwan’s position as the center of the AI hardware boom, but it also underlines how concentrated the world’s advanced chip supply chain remains. If Taiwan stays stable, its role may grow even larger. If military pressure, export-control disputes, smuggling concerns, or U.S.-China tensions worsen, the same concentration becomes a global vulnerability.

For investors and governments, the question is no longer whether Taiwan matters to AI. It clearly does. The question is whether the world’s most important AI supply chain can remain secure while the island at its center faces daily military pressure from China and increasing scrutiny over where advanced chips ultimately end up.

Fact-check date: 27 May 2026
Sources: Reuters, Bloomberg reporting via Reuters

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