Semiconductors

Meta has developed an AI chip to cut reliance on Nvidia, Reuters reports

Meta, the owner of Facebook, Instagram, and WhatsApp, is testing its first in-house chip designed for training AI systems, sources told Reuters.

The social media giant has started a limited rollout of the chip, planning to scale up production if testing delivers positive results. The move represents a crucial step in Meta’s strategy to lessen dependence on external suppliers like Nvidia and lower substantial infrastructure costs.

The company has projected expenses between $114 billion and $119 billion for 2025, with up to $65 billion dedicated to AI infrastructure.

The chip, part of Meta’s Meta Training and Inference Accelerator (MTIA) series, is a dedicated AI accelerator, meaning it is specifically designed for AI tasks rather than general processing. This could make it more power-efficient than traditional GPUs.

Meta is collaborating with Taiwan-based chip manufacturer TSMC to produce the new hardware. The test phase follows Meta’s first ‘tape-out’ of the chip, a crucial milestone in silicon development where an initial design is sent to a chip factory.

However, this process is costly and time-consuming, with no guarantee of success, and any failure would require repeating the tape-out step.

Meta has previously faced setbacks in its custom chip development, including scrapping an earlier version of an inference chip after poor test results. However, the company has since used another MTIA chip for AI-powered recommendations on Facebook and Instagram.

The new training chip aims to first enhance recommendation systems before expanding to generative AI applications like the chatbot Meta AI.

Meta executives hope to implement their own chips for AI training by 2026, although the company continues to be one of Nvidia’s biggest customers, investing heavily in GPUs for its AI operations.

The development comes as AI researchers increasingly question whether scaling up large language models by adding more computing power will continue to drive progress. The recent emergence of more efficient AI models, such as those from Chinese startup DeepSeek, has intensified these debates.

While Nvidia remains a dominant force in AI hardware, fluctuating investor confidence and broader market concerns have caused turbulence in the company’s stock value.

For more information on these topics, visit diplomacy.edu.

AI investment focus shifts from chips to software in 2025

Investors are moving away from semiconductor stocks and turning their focus to software companies as the AI investment landscape evolves.

A surge in AI chip demand drove record growth for semiconductor firms in 2024, but new competition and trade restrictions have dampened enthusiasm. The emergence of China‘s DeepSeek, offering lower-cost AI models, has further pressured chip stocks, leading investors to seek new opportunities in software.

The Philadelphia Semiconductor Index has fallen 5.6% this year, with Nvidia dropping nearly 13%, while software firms such as Atlassian, CrowdStrike, and Palantir have gained between 7% and 19%.

Investment flows reflect the shift, with software-focused exchange-traded funds seeing significant inflows, while semiconductor ETFs have recorded large outflows. Analysts see the trend as a natural progression, with AI technology increasingly monetised through software applications rather than hardware.

Morgan Stanley and other investment firms now favour software firms such as Palantir, Microsoft, and Oracle. While some software companies have yet to see AI-related revenue growth reflected in their financials, analysts predict gains by 2026.

High valuations remain a concern, but investors are betting on the long-term need for AI applications rather than additional hardware.

For more information on these topics, visit diplomacy.edu.

AxeleraAI receives $66 million EU grant for AI chip development

AxeleraAI, a promising AI chipmaker based in Eindhoven, Netherlands, has been awarded a €61.6 million ($66 million) grant by the European Union to develop its Titania chip.

The grant, provided by EuroHPC, aims to bolster Europe’s AI capabilities by supporting the development of a chip specifically designed for “inference” computing in data centres.

However, this initiative is part of the EU’s broader strategy to enhance its AI sector and reduce its dependency on US and Chinese technologies.

Fabrizio Del Maffeo, CEO of AxeleraAI, expressed pride in the award, viewing it as a significant opportunity for the Dutch company to expand its business.

The new chip will be built on the open-source RISC-V standard, a growing alternative to more traditional chip systems like those from Intel and Arm. AxeleraAI’s existing Metis chip is already being used in edge AI applications, such as monitoring safety in factories through CCTV analysis.

While the company does not aim to compete with industry giants like Nvidia in training AI models, Del Maffeo stated that the Titania chip is designed to excel in running large AI models once they are trained.

This shift towards more affordable inference computing is expected to become increasingly important as the demand for AI solutions grows. AxeleraAI has already raised $200 million from investors, including Samsung, since its founding in 2021.

For more information on these topics, visit diplomacy.edu.

Singapore expands charges in server fraud case

Singapore authorities have filed additional charges against three men in a widening investigation into server fraud, which may involve AI chips, court documents revealed on Thursday.

The suspects are accused of deceiving tech firms Dell and Super Micro by falsely representing the final destination of the servers they purchased.

Officials have stated the servers could contain Nvidia chips but have not confirmed whether they fall under US export controls.

The case is part of a broader probe involving 22 individuals and companies suspected of fraudulent transactions. US authorities are also investigating whether Chinese AI firm DeepSeek has been using restricted American chips.

Singapore has confirmed that some servers were sent to Malaysia, where authorities are now examining if any laws were violated.

Two suspects, Aaron Woon and Alan Wei, face additional fraud charges, while a third, Li Ming, had his earlier charge updated to include an alleged offence dating back to 2023.

Lawyers representing the men have either declined to comment or stated that the case is complex due to its international scope.

Meanwhile, Singapore police have seized 42 electronic devices and are analysing bank statements as they work with foreign law enforcement to trace the movement of funds.

For more information on these topics, visit diplomacy.edu.

Nvidia shares drop after US tariffs announcement

Nvidia’s shares plummeted nearly 9% on 3 March following an announcement by US President Donald Trump confirming new tariffs on imports from Canada and Mexico, set to take effect on 4 March. The decline contributed to a broader market downturn, with the Dow Jones falling by 800 points and the Nasdaq dropping by over 3%. Nvidia’s market value took a sharp hit, losing around $265 billion and falling to $2.79 trillion, a steep drop from its previous $3 trillion valuation.

Despite reporting strong earnings, with revenue surging 78% year-over-year to $39.33 billion, Nvidia’s stock has lost 13% since 26 February. The 25% tariffs could affect the company’s operations, particularly as some of its systems are manufactured in the US and Mexico. However, CEO Jensen Huang remains optimistic, highlighting Nvidia’s AI advancements and the upcoming Blackwell chips, which he says will drive strong performance in the next quarter.

Nvidia also plans to play a key role in Taiwan Semiconductor’s $100 billion expansion in the US, a project mentioned by Trump. While the company faces short-term market volatility and policy challenges, its long-term strategy remains focused on technological growth and innovation.

For more information on these topics, visit diplomacy.edu.

Malaysia sets sights on advanced chip production with $250 million deal

Malaysia has secured a landmark deal worth $250 million with Arm Holdings to acquire the company’s advanced chip design blueprints.

The agreement, which spans a decade, will enable Malaysia to produce its own AI chips, including graphics processing units, as demand for AI and data centres continues to surge globally.

The deal is part of Malaysia’s broader goal to become a major player in semiconductor manufacturing over the next ten years.

Prime Minister Anwar Ibrahim confirmed that the deal will also see Arm establish its first Southeast Asian office in Kuala Lumpur. The move is aimed at strengthening the company’s presence in the region, including expanding its reach to Australia and New Zealand.

Alongside this, Malaysia will invest in training 10,000 engineers to support the local manufacturing ecosystem.

The initiative is expected to drive significant economic growth, with Malaysia aiming to create 10 local chip companies, each generating annual revenues between $1.5 to $2 billion.

Malaysia aims to build a complete supply chain for advanced industries, covering everything from AI data servers to autonomous vehicles and robotics.

For more information on these topics, visit diplomacy.edu.

MIPS shifts focus to AI chips for robotics

MIPS, a long-established Silicon Valley company, has revealed a shift in its strategy to focus on designing chips for AI-driven robots.

Once known for competing with Arm Holdings in computing architecture, MIPS now aims to create specialised chips for sensing, decision-making, and controlling robot movements.

However, move like this one comes as the demand for robotics technology, particularly in areas like autonomous vehicles, grows rapidly.

MIPS’ decision marks a major transition from licensing its technology to designing its own chips. Chief Executive Sameer Wasson stated that the company would initially target the automotive industry, with plans to have technology integrated into cars by 2027.

Despite focusing on chip design, MIPS intends to continue licensing its technology to other firms.

This strategic pivot is expected to position MIPS as a key player in the robotics sector, particularly as AI continues to revolutionise industries.

Although MIPS is not transitioning into a full-fledged silicon company, its decision to develop tangible, working chips is aimed at providing greater confidence to potential customers and partners.

For more information on these topics, visit diplomacy.edu.

South Korea launches $34 billion fund for strategic industries

South Korea has announced the creation of a $34 billion policy fund to support companies in key industries such as semiconductors, automotive, and advanced technologies, in response to growing global competition and protectionist policies.

The state-run Korea Development Bank will manage the fund by providing low-interest loans and other financial support over the next five years to businesses involved in national strategic industries.

The government stressed that maintaining competitiveness in these strategic sectors has become crucial to the country’s economic security, particularly amid the uncertainties caused by the new US administration.

South Korea has identified 12 industries, including semiconductors, AI, and biopharmaceuticals, as critical for its future economic stability and will offer targeted financial support to strengthen these sectors.

In addition to the fund, South Korea also unveiled new policies to attract skilled global talent in cutting-edge fields. These measures include offering top-tier visas and permanent residency to professionals with experience at major international firms, aiming to enhance the country’s workforce in strategic industries.

For more information on these topics, visit diplomacy.edu.

UK regulator approves Synopsys’ $35 billion Ansys deal

Britain’s competition regulator has approved Synopsys’ $35 billion acquisition of Ansys after the companies addressed concerns about the potential negative impact on innovation and pricing.

In December, the regulator raised alarms that the deal could reduce competition in the chip design software market, possibly leading to higher prices and less innovation.

However, following negotiations and the companies’ offer of remedies to mitigate these concerns, the regulator decided not to refer the deal for an in-depth phase-2 investigation.

Synopsys, a major player in the chip design software industry, announced the acquisition in January. The deal, which will be a mix of cash and stock, aims to strengthen Synopsys’ portfolio and expand its offerings in the design and development of complex products.

Ansys, a well-established provider of simulation software, is used by a range of industries, from aerospace to sports equipment, to design and optimise products like aeroplanes and tennis rackets.

The acquisition marks a significant move for Synopsys, enhancing its capabilities in the design and development of advanced technology.

The deal is expected to bring together the strengths of both companies, allowing them to offer a broader set of solutions to customers in various sectors, from semiconductor manufacturing to engineering and consumer goods.

For more information on these topics, visit diplomacy.edu.

Trump pushes for end to $52 billion semiconductor subsidy

Donald Trump has called for the repeal of the CHIPS and Science Act, a key piece of legislation passed in 2022 to support semiconductor manufacturing in the US.

Trump criticised the law during a speech to Congress, describing it as a waste of hundreds of billions of dollars and suggesting the funds should instead be used to reduce national debt. His remarks mark his most forceful criticism of the act to date.

The CHIPS Act, signed by President Joe Biden, allocated $39 billion in subsidies for US semiconductor production and related industries, along with $75 billion in government-backed loans.

The initiative was part of a broader strategy to reduce reliance on foreign-made chips and address national security concerns.

Trump argued that rather than offering financial incentives, the government could avoid imposing tariffs to encourage semiconductor companies to build factories in the US.

However, the program has garnered support from officials, including Commerce Secretary Gina Raimondo, who played a key role in securing investments from leading global semiconductor firms like Samsung, Intel, and TSMC.

New York Governor Kathy Hochul defended the CHIPS Act, emphasising its role in bringing significant investment and job creation to the state, including Micron’s $100 billion investment in Central New York.

Trump’s comments have raised concerns about the future of these grants and the potential impact on such developments.

For more information on these topics, visit diplomacy.edu.