Nvidia invests $1 billion in South Korea’s Naver and will become its third-largest shareholder

The American semiconductor giant Nvidia will invest $1 billion this Friday in the South Korean tech company Naver, becoming its third-largest shareholder, as part of a strategic alliance to create large-scale data centers used for artificial intelligence (AI).

Nvidia will acquire 6,558,435 new shares today, equivalent to 4.13% of the capital, according to documentation filed by Naver with the South Korean financial regulator earlier this week.

The US firm will thus position itself as the third-largest shareholder of Naver, behind the South Korean National Pension Service (9.49%) and the US multinational investment management company BlackRock (7.31%), according to the local news agency Yonhap.

The operation comes after Naver met the condition imposed by Nvidia to guarantee funding of at least $9 billion to develop AI infrastructure, such as the acquisition of equipment and data centers, as reported by the South Korean tech company in a statement last month.

Naver, one of the leading South Korean tech companies and ranked among the 25 largest companies by market capitalization on the main local stock index, the Kospi, operates the country’s main internet portal and search engine, in addition to offering e-commerce services, digital payments, cloud computing, and proprietary AI models.

In June, Naver announced a partnership with Nvidia to expand its AI infrastructure, starting with its data center in Sejong, in the center of the Asian country.

Despite this Friday’s investment, Naver shares were down about 2.5%, after two hours of trading on the Kospi, which was also losing nearly 5%.

The stock market decline comes amid fears over greater restrictions on AI development and data center investment, two days after the victory of the Democratic Party, which favors regulation of the sector, in both houses of the U.S. Congress.