Nvidia put $3.5 billion into convertible bonds issued by MediaTek, a Taiwanese chipmaker whose shares Mustafa Neemuchwala says are up 200% this year.
The reflex reading of any Nvidia investment now is circular financing — money handed to a customer who hands it back as a purchase order. Neemuchwala said the structure rules that out here, because the party paying MediaTek is a laptop assembler, not Nvidia.
"Even Broadcom, even the great Broadcom is a cheetah, you know, maybe a tiger, uh, depending on the context."
Neemuchwala is a partner at New Enterprise Associates and the investor this show calls back to read semiconductor deals, and he took this one apart clause by clause on air.
I listened to the full segment so you can skip it.
Here are the 8 takeaways that matter.
👤 Guest: Mustafa Neemuchwala, partner at New Enterprise Associates, who invests in semiconductors and the infrastructure around them and is a returning guest on the programme
🎙️ Host: Akash Pasricha, who anchors TITV, The Information's live weekday news show at 10 a.m. Pacific
📰 Published: 1 September 2026 on YouTube (The Information)
🔴 YouTube | ⏱️ 10 min
Key Takeaways
The deal is an ecosystem investment, not circular financing Circular financing is one party being both customer and vendor; here the money comes from a third party
Nvidia can now make money when Google's TPU takes inference share MediaTek builds the inference version of the TPU, so its success pays a shareholder that competes with it
The instrument is downside-protected debt with an option stapled on The conversion price sits above today's share price, and MediaTek's stock is up 200% this year
Nvidia is buying a position in every kind of compute, not just accelerators Its own Vera server processor, $5B into Intel for x86, and now MediaTek for Arm-based laptops
The real target is Broadcom's hold on the wiring between chips MediaTek, Marvell and Credo all own the high-speed chip-to-chip technology Nvidia wants on its side
Nvidia has become the semiconductor ecosystem's main financial investor as well as its main supplier
The laptop makers pay MediaTek, which is what keeps the money from going in a circle
The precedent he reached for is Google and Amazon both funding Anthropic Two competitors in the same cap table, both of whom he says profited
1. Where MediaTek Competes
Pasricha opened by asking whether MediaTek competes with Broadcom in custom chips designed for one customer.
On Google's chips, yes — and the two have split the work. "In the context of Google's TPU, the answer is yes." Neemuchwala went on: "You know, MediaTek has been doing that the inference version of the TPU version V8, the last iteration and Broadcom is doing the training version."
Everywhere else the rivalries are different. On Arm-based processors MediaTek runs into Intel and Qualcomm, and it competes again in automotive chips and other systems-on-chip work
His framing of the industry is that the competitive map is not clean. Companies license each other's designs across domains, and MediaTek's business is partly selling that intellectual property to firms entering a new area
2. Nvidia Wants Every CPU
Nvidia is assembling a processor position on every architecture at once. "So, uh, Nvidia announced their own Vera CPU, which is their server CPU." Then: "Then they announced a tie up $5 billion they put into Intel, uh, last year, and that was for x86, which is Intel's architecture based CPUs, but also for laptops and PCs." MediaTek supplies the Arm-based version of the same idea, aimed at laptops
He described the strategy in one line. "Nvidia wants to be everywhere that compute happens."
The relationship already ran both ways before the money moved. MediaTek was named as one of Nvidia's NVLink Fusion partners, so this investment lands on top of an existing technical tie
3. What NVLink Fusion Is
Pasricha stopped him to ask what NVLink Fusion actually is.
It is the wiring between chips inside a server rack. "Yeah, I think the simple way to think about it is interconnect across the rack."
The point is to be present whoever's accelerator wins. MediaTek is building the inference TPU and other firms are building their own custom accelerators, and "Nvidia wants to have uh Nvidia interconnect across the rack and across a lot of these data center designs no matter whose accelerators are being used"
Asked whether that is the same thing as networking chips, he said it is one part of networking: "Yeah, precisely interconnect this is one of the domains of networking." He placed it at the rack level and in the connections between individual chips
4. Aiming at Broadcom
Pasricha put his own reading to the guest: Nvidia has been pushing into networking chips, Broadcom leads that market, MediaTek arrives as a cheaper competitor to Broadcom, and the investment is a way of coming at Broadcom.
Neemuchwala broadened it rather than agreeing outright. "I would say everybody is kind of getting at each other, but Nvidia's mindset will continue to be that they're going to own everything in the system."
That includes the high-speed circuitry that moves data between chips, which several firms already own. "For example, MediaTek has SerDes IP, Marvell, Credo, of course, Broadcom."
He said Broadcom is already surrounded, and cast the investment as pre-emptive. Nvidia, on his reading, is thinking about its own future and how to stop Broadcom competing with it The image he used for the pecking order: "Nvidia is the lion in the ecosystem." Then: "Even Broadcom, even the great Broadcom is a cheetah, you know, maybe a tiger, uh, depending on the context."
5. Not Circular Financing
Asked whether this is another data point for the circular-financing worry, Neemuchwala said the label does not fit.
His test is whether the two companies are each other's customer and vendor. "I think in this case it's harder to make that argument." The clearest circular arrangements, he said, are the ones where a vendor pays a customer to buy the vendor's products
What this is instead: "This is I think more of an ecosystem play where I think this is a partner financing a partner."
The wider change is what Nvidia has become on the balance-sheet side. "Nvidia is becoming the primary financial investor in this ecosystem as well"
The consequence he found striking is who Nvidia now profits from. "I mean that's crazy if you think about it because now Nvidia may make money from its own competitors launching their inference product into the market."
6. How the Convertible Pays
Pasricha asked him to run through the instrument more slowly, for himself and for viewers.
A convertible note is debt first, and that is the protection. "So the convertible note structure is essentially a form of debt, right? It's a note first and that note gives them downside protection." The worst case he named: "So let's say MediaTek for some reason were to go bankrupt, Nvidia would have a debt-like instrument that it can capture value from"
The conversion right behaves like an option, struck above today's price. Nvidia only converts into shares if MediaTek's stock rises meaningfully from here He said that option matters because the share-price appreciation at MediaTek "has been gigantic this year you know up 200% this year"
His conclusion is about the deal-making, not the money. "Nvidia is doing these structured deals in a very smart way" In a genuinely circular arrangement, he argued, the structure would be an afterthought and the counterparty would be far less willing to take on debt
The second payoff is influence. Being tied in more closely means more say in MediaTek's decisions, more rack designs carrying Nvidia's interconnect, and eventually a route into cars through the processor work
He also flagged rumors about the next generation of the chip and about Meta becoming a customer, without endorsing either
7. Who Pays MediaTek
Pasricha pressed on whether Nvidia is paying MediaTek for the technology behind the NVLink Fusion work.
It is, and it already was. "Nvidia will pay for sure. Nvidia has been paying MediaTek for this ARM uh CPU design."
But the buyer of the finished product is someone else, which is the whole point. "Exactly. It'll be the end customer uh you know the laptop assemblers or wherever the wherever the CPU is going who'll be paying for it. And these guys are essentially partners."
Intel is the contrast case. There the relationship is more of a customer one, because Nvidia has chips made at Intel's foundry, the manufacturing business Intel is standing up against TSMC
The MediaTek tie also buys manufacturing room. Nvidia already has a lot of capacity at TSMC, he said, and MediaTek brings its own on top of that Pasricha's own point, and Neemuchwala agreed: the binding constraint in the industry right now is TSMC's advanced packaging capacity
8. The Anthropic Analogy
The precedent he reached for was an AI lab, not a chip deal. "I also think the other analog I would drive a little bit on this is kind of like what happened with Anthropic where Google and Amazon who are you know theoretically the competitors both invested." MediaTek is a large Google partner and is now, in his words, a large Nvidia partner financially
He expects the pattern to spread. "I think you just expect to see more of these tie-ups in the polyamorous AI compute semiconductor industry that we live in." His reasoning: a company that refuses these overlapping arrangements watches a rival take the seat, and loses the financial upside as well
He noted that Google and Amazon have both profited heavily from what they put into Anthropic
Bonus Insights
Pasricha framed the deal for viewers at the top of the segment: $3.5 billion, in convertible bonds, issued by a Taiwanese chipmaker
The host's Broadcom thesis was his own analysis rather than the guest's, and he asked directly whether the guest agreed
This was the second of three interviews in one episode; the other two are written up separately
Neemuchwala's bottom line is that Nvidia has stopped behaving purely as a supplier and now takes financial positions across the chip ecosystem, structured so that it earns whether the market buys its accelerators or a competitor's.
Products, Companies & Tools Mentioned
Nvidia (The buyer of $3.5 billion of MediaTek convertible bonds, and on his account the ecosystem's primary financial investor as well as its largest supplier)
MediaTek (The issuer: builds the inference version of Google's TPU, licenses Arm processor designs to Nvidia, and owns high-speed chip-to-chip technology; its shares are up 200% this year)
Broadcom (The networking-chip leader Nvidia is circling — it builds the training version of Google's TPU, and he called it a cheetah to Nvidia's lion)
Nvidia NVLink Fusion (The rack-level interconnect Nvidia wants in every data-center design regardless of whose accelerator sits in the rack; MediaTek is a named partner)
Google TPUs (The alternative accelerator with the broadest team behind it, split between MediaTek for inference and Broadcom for training)
Intel (Took $5 billion from Nvidia last year for x86 processors, and is the foundry Nvidia now has chips made at — a customer relationship rather than a partnership)
Marvell and Credo (Named with MediaTek and Broadcom as the holders of the chip-to-chip interconnect technology Nvidia wants to own)
TSMC (Where the capacity constraint sits; the host named advanced packaging as the binding limit and the guest agreed)
Qualcomm (Named with Intel as MediaTek's competition in Arm-based processors)
Anthropic (His analogy for the deal: Google and Amazon, nominal competitors, both invested and both profited)
Meta (The subject of rumors he mentioned about a future MediaTek customer, which he did not endorse)
Amazon (The other side of the Anthropic comparison, and the owner of a rival accelerator line)
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