India is reportedly planning to collaborate with Nvidia to jointly develop AI chip. According to a report by the Economic Times, the proposal was made by Jensen Huang, founder and CEO of Nvidia, during PM Modi's visit to the U.S. Nvidia is known for its graphics processing unit (GPU) chips, which have become integral to AI and have significantly boosted the company's valuation.

IT Minister Ashwini Vaishnav confirmed the recent development by saying, "Yes, we are discussing with Nvidia the development of an AI chip; discussions are at a preliminary stage."

Although much information has not been disclosed in the public domain, India is definitely interested in developing a semiconductor manufacturing industry and ready to expand its already substantial role as a source of chip design talent.

A spokesperson for Nvidia confirmed the company's interest in joining hands with India's chip design talent. "We think India's knowledge of semiconductor design can help us make new and special products for India," they stated. Potential applications for an India-specific chip could include AI, machine learning, data centres, and IoT devices.

The official further said, “The jointly developed chip could be customised for Indian use cases like in Indian Railways’ security system-Kavach. Besides this, it can be used by Indian startups, companies and the government to support various apps that can be developed by the government under its AI mission.

Huang will be visiting India later this week as his annual trip to the country. Last year during his visit to India, Huang met PM Modi and both discussed the potential that India offers in the era of AI.

Recalling his last meeting with PM Modi Huang said Modi told him, “India should not export flour to import bread. This makes perfect sense. Why export the raw material to import the value add? Why export the data of India, so that you can import AI?”

The official stated if they co-develop the chip, the primary chip will be developed by Nvidia’s chip design partners like AMD or Arm while the remaining top 10-20% will be designed and developed by the government-owned Centre for Development of Advanced Computing (C-DAC) or a private chip design company in India.

“There are only two countries in the world who co-develop the chip either us or Germany. India is the top choice due to the sheer size of the talent available in chip design, which no other country has,” said the official.

A recent Boston Consulting Group (BCG) study found that while India hosts a significant portion of the world's chip designers (19%), many of these skilled professionals work for the back-office operations of multinational chip design companies. These companies typically manufacture chips in other regions and then import them to India for use in various electronic products.