Nvidia, the chipmaker valued at $2.7 trillion, is spending big to acquire real estate next to its Santa Clara headquarters.
According to documents filed last week with the county, Nvidia paid $123 million to purchase a 10-building office park, the Santa Clara Commerce Park, on the 2300 block of Walsh Avenue.
The complex totals 251,000 square feet and sits across the street from Nvidia’s headquarters at 2788 San Tomas Expressway. It comprises office suites and flex warehouse space that is leased to a variety of tenants, including an Indian community center, a fitness studio, and a vocational school specializing in phlebotomy.
Last year, Nvidia paid $374 million to buy out its landlord and assume ownership of the campus it had been occupying since 1998. The company paid all cash in both transactions — a tiny fraction of the last quarter’s revenue of $39.3 billion.
It is not immediately clear what Nvidia plans to do with the newly acquired property. A spokesperson declined to comment.
But a source familiar with Nvidia’s Silicon Valley real estate dealings said the company is likely pursuing what is known as a “covered land play” — buying buildings that can be leased for rental income in the short term, while advancing its development into other uses.
Between 2018 and 2022, Nvidia built and opened two office buildings near its HQ, totaling more than 1.2 million square feet. Those buildings, which are connected by a park and include event space, are named Voyager and Endeavor (references to “Star Trek”).
Based on Nvidia’s meteoric rise as a result of the artificial intelligence boom and its recent commitment to invest billions of dollars in U.S.-based chip manufacturing, the newly acquired buildings will likely be demolished over time, the source said, to make way for data centers or a semiconductor fabrication plant.
Nvidia does not manufacture its signature chips on-site. The majority of its chip designs are built by the Taiwanese Semiconductor Manufacturing Co., which is based in Taiwan but is ramping up its U.S. factories in Phoenix. Nvidia is in the process of building a plant in Houston with Foxconn and another in Dallas with Wistron.
The Santa Clara company, which had been known for graphic processing units used in video games, has seen its valuation skyrocket in recent years as its chips are being used to drive the AI revolution. Generative AI tools such as ChatGPT run on Nvidia’s GPUs.
But its seemingly unstoppable rise hit a speedbump last month when the Trump administration rolled out export controls on AI chips sold to China. As a result, Nvidia’s earnings took a $5.5 billion hit, and CEO Jensen Huang flew to Beijing to meet with clients. Analysts had estimated the company would generate $17 billion in sales to Chinese customers this financial year.
Export controls that had been in place under the Biden administration had exempted certain Nvidia chips.