Nvidia Corporation
Nvidia designs the chips that power every major AI lab - ChatGPT, Claude, Gemini - but can't manufacture a single one.
Nvidia designs the chips that power every major AI lab - ChatGPT, Claude, Gemini - but can't manufacture a single one. The company's H100 and A100 GPUs are built by TSMC, making AI advancement fundamentally dependent on Taiwan Semiconductor's manufacturing capabilities. Nvidia exemplifies the modern fabless model: design brilliance without fabrication burden.
This dependency isn't weakness - it's strategy. By relying on TSMC's keystone position, Nvidia avoided the $20+ billion capital expenditure required to build leading-edge fabs. Instead, the company invested in CUDA software, AI libraries, and ecosystem development that created lock-in effects competitors can't replicate. When AI exploded in 2022-2023, Nvidia had both the chip designs and the software infrastructure that made those chips 10x easier to program than alternatives.
The lesson: in complex ecosystems, dependency on keystones beats vertical integration. Nvidia's $2+ trillion market cap (2024) was built on recognizing that controlling the hard parts of manufacturing isn't as valuable as controlling the hard parts of making the technology accessible.
Nvidia Corporation Appears in 2 Chapters
Nvidia's AI dominance depends entirely on TSMC manufacturing its H100/A100 GPUs - no alternative foundry can match performance at scale.
How AI scaling depends on TSMC's keystone position →Nvidia designs leading-edge chips but relies completely on TSMC's manufacturing capabilities for production.
Nvidia's dependence on TSMC as keystone species →