The chipmakers Nvidia and electronic manufacturer Foxconn plan to collaborate to set up artificial intelligence (AI) factories.

In 2023, the world witnessed how AI can revolutionize software. While the AI products launched this year were mainly limited to chatbots, image generators, and other software, the technology can build powerful physical devices, such as robots and AI-powered vehicles.

According to the Financial Times, Foxconn would utilize Nvidia’s chips to build “a new class of data centers powering a wide range of applications.” The companies have called these data centers “AI Factories.”

During Foxconn’s annual tech day, Nvidia CEO Jensen Huang announced that the AI factories will train autonomous vehicles, robotic platforms, and large language models (LLMs). 

Read more: Will AI Replace Humans?

The development comes as Foxconn, the company mainly known for manufacturing electronic devices, is trying to diversify its business. Foxconn now wants to focus on building the computing infrastructure that powers autonomous technology.

Meanwhile, the US’s decision to restrict the export of semiconductor chips to China may negatively impact the revenue of Nvidia. The US introduced the new restrictions, fearing that China has been using the advanced chips to strengthen its military capabilities and build devastating weapons.

On the other hand, the US Pentagon is planning to utilize generative AI for military tasks.

Nonetheless, following this development, the price of Nvidia stock fell by 7.81% since Monday’s close. Despite the fall, Nvidia’s market capitalization remains above $1 trillion. Earlier this year, it became the first chipmaker to achieve a valuation of $1 trillion.

Read more: AI Stocks: Best Artificial Intelligence Companies To Know in 2023

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