Taiwan's Foxconn, the world's largest contract manufacturer, will build artificial intelligence data factories using Nvidia chips and software to use in products including self-driving cars, the companies said on Wednesday. Sharing a stage at Foxconn's annual Tech Day in Taipei, Foxconn Chairman Liu Young-way and Nvidia CEO Jensen Huang said their companies were building AI factories together.

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Huang showed a hand-drawn sketch of what the two companies are building, which he called an "AI factory". "This is a factory that takes data input and produces intelligence as an output," he said. "In the future, every company, every industry, will have AI factories." What Nvidia and Foxconn are building is an entire end-to-end AI system for autonomous electric vehicles, with the AI factory developing the car's software, Huang added.

"This car would of course go through life experience and collect more data. The data would go to the AI factory, the AI factory would improve the software and update the entire AI fleet," he said. "This entire end-to-end system, on the one hand AI factory, on the other end EV fleet, is what Nvidia and Foxconn are building."

Nvidia's shares have tripled in 2023, giving the company a market value of more than $1 trillion, driven by excitement over the central role of the company's chips in AI applications. Foxconn, the main supplier for Apple's (AAPL.O) iPhones, wants to replicate its level of success in assembling personal computers and smartphones as it expands into building EVs and other applications. Liu, standing next to Huang, said Foxconn is "trying to convert itself from a manufacturing service company to a platform solution company," pointing to smart cities and smart manufacturing among the other applications for which it will use AI factories.

"Now I know what can power and what can make these smart platforms happen," Liu said.