Nvidia, the most valuable chip company currently on the market, is entering a deal with Foxconn, the iPhone manufacturer, in a partnership to create ‘AI factories’.

The partnership will see Foxconn integrating NVIDIA’s chip technology to develop a “new class” of data centres, with applications ranging from digitalised manufacturing workflows, AI-powered electric vehicle and robots platforms, and ass to the growing number of language-based generative AI services.

These AI factories will be created using NVIDIA GPU computing infrastructure built for transforming vast amounts of data into valuable AI models and tokens.

Foxconn plans to use NVIDAI tech as the foundation for some of their upcoming smart models, including EV, robotic systems, and a Foxconn Smart City.

“A new type of manufacturing has emerged — the production of intelligence. And the data centers that produce it are AI factories,” said NVIDIA founder and CEO Jensen Huang. “Foxconn, the world’s largest manufacturer, has the expertise and scale to build AI factories globally. We are delighted to expand our decade-long partnership with Foxconn to accelerate the AI industrial revolution.”

The plans come in the wake of the US imposing new chip export restrictions on China, in a major blow to Nvidia.

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Nvidia said that at least two of its chips specifically geared toward the Chinese market were being blocked as part of the restrictions, and their start stock, which had previously hit some of the highest in the company’s history, feel by nearly 5% as a result.

China makes up around a quarter of Nvidia’s data chip market, and restrictions could potentially dampen its sales.