The world’s most valuable chip company Nvidia and iPhone maker Foxconn are joining forces to build so-called “AI factories”.

Nvidia chips power a “wide range” of applications in this new type of data center, according to the firms.

Training autonomous vehicles, robotic platforms, and large language models are among them.

As a result, Nvidia is facing a blow as the US threatens to cut off more exports of advanced chips to China.

According to Nvidia, Washington’s latest export restrictions will block sales of two high-end artificial intelligence chips it created for the Chinese market, the A800 and H800.

Jensen Huang, CEO of Nvidia, and Young Liu, chairman of Foxconn, spoke at Foxconn’s annual technology showcase in Taipei on Wednesday.

A new type of manufacturing has emerged – the production of intelligence, and the data centers that produce it, are AI factories,” Mr Huang said, according to Reuters, adding that Foxconn had the expertise to build such factories globally.

Among other applications for AI factories, Liu noted that Foxconn is trying to transform itself from a manufacturing service company to a platform solution provider.

As a result of the company’s advanced chips being used in AI applications, Nvidia’s stock market value has risen to over $1 trillion.

The company became the fifth publicly traded US company to join the so-called “Trillion dollar club”, along with Apple, Microsoft, Alphabet, and Amazon.

Aside from Apple products, Foxconn has been trying to diversify its business and replicate its success in assembling personal computers and smartphones.

The two companies announced a partnership in January to develop autonomous vehicle platforms, in which Foxconn will manufacture electronic control units for cars based on Nvidia chips.