LG Electronics executives are expected at NVIDIA headquarters on Monday to work out concrete cooperation on AI and robotics.
• Discussions between LG and NVIDIA at executive level
• Announced cooperation enters new phase
• SK hynix also benefits and temporarily overtakes Samsung as the most valuable company in South Korea
LG Electronics shares rose sharply on the South Korean stock exchange on Monday: at the end of trading, the share rose 7.57 percent to 227,500.00 won.
The trigger for the price gains at the start of the week were reports of high-level discussions at NVIDIA headquarters. According to “TheKoreaTimes”, a delegation of around 30 leading LG managers will arrive at the AI top dog in Santa Clara on Monday to talk about the concrete steps in cooperation in the areas of artificial intelligence, robotics and digital infrastructure. This means that the cooperation between the two companies, which was already announced at the beginning of the month, is now entering a new phase.
“One LG” approach is intended to maximize synergies
The composition of the South Korean delegation is also causing a stir. According to “TheKoreaTimes”, not only representatives from LG Electronics are taking part in the US visit to NVIDIA, but also executives from other group companies such as LG CNS, LG AI Research and the research cluster LG Science Park. According to the news site, observers therefore expect that a focus will be on the so-called “One LG” strategy, in which the core competencies of the entire group are bundled in order to maximize synergistic cooperation with NVIDIA.
This approach differs from many other AI partnerships, which are often limited to individual business areas. LG instead appears to be looking at the entire value chain – from data centers to software platforms to robots and intelligent industrial systems.
Physical AI and robotics probably in focus
The focus of the discussions is likely to be what NVIDIA has been calling “Physical AI” for months. This refers to AI systems that not only generate or analyze digital content, but also interact directly with the physical world. These include humanoid robots, autonomous machines, intelligent factories and digital twins of real production environments.
“Seoul Economic Daily” writes that both companies particularly want to examine ways in which NVIDIA’s AI platforms can be combined with LG’s hardware and robotics competencies. The South Korean group has extensive experience in the development of household appliances, service robots, industrial automation and mobility solutions, while NVIDIA has made significant progress in simulation and training platforms for autonomous systems in recent years. Industry observers therefore see a potentially complementary partnership, with NVIDIA providing the digital brain and LG providing the physical platform.
At the beginning of June, both companies had already announced a cooperation in building an AI infrastructure and so-called “AI Factories” as part of NVIDIA CEO Jensen Huang’s visit to Asia. Analysts see the planned visit to California as an indication that the collaboration between the two tech giants is taking more concrete shape.
Signal effect for the entire technology sector – SK hynix overtakes Samsung in terms of market value
However, the news that executives of the South Korean company are visiting NVIDIA headquarters did not only affect LG Electronics shares. Other Korean tech companies are also benefiting from the positive mood surrounding the topic of AI. For example, shares from SK Hynix in Seoul also rose in price by 5.61 percent to 2,919,000 won.
At times, the price gains at SK hynix were even higher on Monday, which meant that the manufacturer of HBM memories was able to overtake Samsung Electronics as the most valuable listed company in South Korea. According to data from “Reuters”, the memory chip manufacturer’s market capitalization reached around 2,082.5 trillion won, which was just above the market value of Samsung Electronics, which – excluding preferred shares – was 2,081.3 trillion won.
The rise of SK hynix represents a remarkable turnaround. In the early 2000s, the company at the time was on the verge of collapse due to high levels of debt. Today, however, SK hynix is benefiting greatly from the global AI boom. The decisive factor is the market-leading position in HBM memories, which are used in the AI accelerators from NVIDIA and other technology companies.
The next steps will be crucial
While LG is trying to position itself as an important partner for robotics and so-called “Physical AI”, SK hynix is already one of the central suppliers of the infrastructure on which the global AI revolution is built. The fact that both stocks rose significantly on the same day illustrates how strongly investors are currently betting on companies that will directly benefit from the expansion of the AI ecosystem.
What will now be crucial is whether concrete projects emerge from the meeting between LG and NVIDIA in Santa Clara. Market participants will pay particular attention to possible announcements regarding robotics platforms, AI data centers, industrial digital twin solutions or joint development programs. If LG actually becomes one of NVIDIA’s most important industrial partners in the field of “Physical AI2”, this could permanently change the group’s strategic position in global AI competition.
Carolin Ludwig, Claudia Stephan, editorial team finanzen.net
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