Nvidia lays out plans to build AI supercomputers in the US

This is, said Bickley, a “job killer, not a job enabler. The reality is that this announcement likely seeks to appease the US government’s desire to reshore this work in the US. However, the majority of the final server assembly work already takes place in Mexico today, at a much lower cost of labor than can be realized in the US.”

He said, “[it is] likely a hedge to delay tariff impacts on Nvidia products coupled with a strategy to start the process of building highly automated facilities that can close the labor arbitrage gap that exists today.”

Patrick Moorhead, founder and chief analyst at Moor Insights & Strategy, said he was waiting for something out of Nvidia, as the company has been quiet on things related to tariffs.

The company’s plans, he said, likely revolve around L11 production, “which is the creation of a fully tested system. I doubt this includes PCA (mainboard) manufacturing or they would have said this discretely. Therefore, it is still likely that the mainboards will be produced in Taiwan or Mexico. The highest-performance AI servers are a challenge to build, test, and validate.”

Therefore, said Moorhead, “it makes sense that Nvidia would do this in the US for US customers. I believe some OEMs like Dell Technologies already do L11 in the US. The wildcard here is the import duties on the different components coming in from Taiwan, China, and Mexico.”

In the announcement, Jensen Huang, founder and CEO of Nvidia, said, “the engines of the world’s AI infrastructure are being built in the United States for the first time. Adding American manufacturing helps us better meet the incredible and growing demand for AI chips and supercomputers, strengthens our supply chain and boosts our resiliency.”