US chipmaker NVIDIA will expand its partnership with Vietnam’s top tech firms.

The move could help the country develop its artificial intelligence (AI) and digital infrastructure, the company’s CEO Jensen Huang said during a visit to Vietnam’s capital, Hanoi.

“Vietnam and Nvidia will deepen our relations, with Viettel, FPT, Vingroup, VNG being the partners Nvidia looks to expand partnership with,” Huang said.

In October, multiple sources cited by Reuters revealed that Vietnamese government officials were in talks with several chip companies to build the country’s first semiconductor plant.

For Nvidia, the move to invest in Vietnam comes at a time when American businesses are looking to decouple their supply chains from China. However, last month, Vietnam’s parliament adopted a minimum corporate tax on multinationals with a global turnover of more than $825m.

The law, meant to bolster the government’s coffers, will enter into force from 1 January 2024, with many fearing this could deter foreign investment in the country. Around 122 foreign companies, including tech giants like Samsung, will face increased tax costs.

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By GlobalData

Despite this, today’s (11 December) announcement has been cheered on by Vietnamese officials, including the country’s Investment Minister Nguyen Chi Dzung, who said Vietnam had been preparing mechanisms and incentives to attract investments in the AI and semiconductor sectors.

According to Dzung, Nvidia is also considering setting up a research and development facility in Vietnam, following a meeting between Huang with the Vietnamese Prime Minister Pham Minh Chinh on Sunday.

Vietnam has been enjoying increased foreign direct investment (FDI) levels in 2023. Between 1 January and 20 October 2023, FDI surged 54% in the southeast Asian country, with $15.29bn invested in 2,608 new FDI projects. Around $5.29bn of them were invested in 1,051 existing projects.