Nvidia's Huang pledges AI will boost manufacturing jobs. A test will
come in Texas
[June 17, 2026] By
JOSH BOAK
SHERMAN, Texas (AP) — Jensen Huang’s company Nvidia makes the computer
chips that unleashed a revolution in artificial intelligence. Now he's
wagering that an AI buildout can revive U.S. manufacturing, pushing past
limits facing science and society.
That vision might hinge on a factory groundbreaking an hour north of
Dallas.
Nvidia on Tuesday formally unveilied plans for a major upgrade to its AI
infrastructure as part of its $2 billion partnership with the factory’s
owner, Coherent. The factory will produce the material for a laser to
transmit data among computer chips, allowing those chips to work as a
single system with more power, speed and efficiency, according to
executives who discussed the technology before the public announcement.
“AI factories are the infrastructure of the new industrial revolution,"
Huang said in a statement.
The factory represents a fundamental test of whether, as Huang believes,
AI will be a source of job creation instead of a technology that
supplants workers as it becomes possible to write software, analyze a
spreadsheet, run an assembly line or even drive an automobile without
much human effort.
Huang has led Nvidia as it became the world’s most valuable company,
worth roughly $5 trillion, to a point where it's looking beyond chips to
developing entire AI systems. The companies expected to rely on those
systems to further develop AI models could soon join the elite circle of
those with a valuation of more than $1 trillion. Just how that wealth
spreads and the consequences of the technology have rapidly evolved into
fundamental debates about how America itself is structured.
AI is powering academic breakthroughs and it creates the promise of
rapid economic growth. But even if stocks are buoyed by those
possibilities, there are voters who see reasons for concern over its use
of electricity, the potential for job losses and the newfound national
security risks.
A shifting approach on AI
President Donald Trump's administration, which once saw a light
regulatory touch as essential for fostering AI’s development, has
recently begun to reverse course. It placed export controls on the AI
company Anthropic’s latest models, leading the company on Friday to
shutter all public access to those models over security concerns.
Trump, a Republican, signed an order to have new AI models voluntarily
vetted by the government. He has also mused about the government owning
a stake in the companies that develop AI, so that the public could
benefit from the expected windfall even if that would blur the lines
between the public and private sectors.
Still, Trump depends on the AI boom to fuel economic growth, drive
future gains in manufacturing and construction, and push the stock
market to new heights. He has insisted on Huang accompanying him on
foreign trips, most recently having Air Force One pick up the
leather-jacketed CEO in Alaska while en route for the state visit to
China.
Trump has called Huang “smart,” a “friend” and “amazing” — and he’s
publicly recounted that he once mused about breaking up Nvidia because
of its dominance, only to admit that Huang was someone that he needed as
an ally.
“We are proud to have you in our country,” Trump told the Taiwanese
immigrant last year.
AI buildout creating jobs
Coherent’s factory in Sherman, Texas — which includes Nvidia as a major
customer — relied on bipartisan government support. The Biden
administration approved $33 million in backing from the CHIPS and
Science Act to help fund its buildout, while the Trump administration
provided an additional $17 million grant to help ensure a key part of
the AI infrastructure would be made in America.
[to top of second column] |
A Coherent manufacturing facility, where Nvidia chief executive
officer Jensen Huang is scheduled to speak at a groundbreaking
ceremony for an expansion project, is shown in an aerial view on
Tuesday, June 16, 2026, in Sherman, Texas. (AP Photo/Jeffrey
McWhorter)
 “The reason the award was expanded,
and we announced this today, was because we continue to grow
capacity,” Coherent CEO Jim Anderson said in an interview. “We saw
the opportunity with the tremendous AI demand to grow capacity even
more than we had originally planned.”
Including construction workers, Coherent estimates that the factory
will create 1,000 jobs, with about 550 of them in advanced
manufacturing, engineering and technical roles. Anderson said the
floorspace of the plant would double and its output would quadruple
with the additions being built.
The factory expansion will increase production of Indium Phosphide,
which is used to make a laser that has the optical intensity of the
surface of the Sun. Each second, the light pulses a few hundred
billion times through a fiberglass straw the width of a human hair.
That allows Nvidia’s computer chips to share information and work
together as one system in what Huang has dubbed “AI factories.”
Power consumption would be cut up to 50%, enabling computations to
occur faster and at a drastically lower price. The prospect of
reducing the cost of tokens — the industry’s term for AI usage —
would make it easier for AI to expand its reach and abilities.
In a paper published this month, the economists Jessica Wachter and
Jonathan Wachter noted that the five largest U.S. technology firms
invested $380 billion last year as part of the AI buildout and that
sum could roughly double this year. Based on that investment, they
estimate the possibility of rapid economic growth as AI accounts for
more of U.S. gross domestic product. While AI is roughly 3% of the
economy now, that figure could grow to a range of 8% to 39%.
One Nvidia executive, who insisted on speaking on background to
describe its industrial strategy, stressed that the company was
moving from developing computer chips to providing entire AI
systems. That has meant clustering more production in the U.S. with
chipmaking increasingly centered in Arizona and the assembly process
increasingly located in Texas, so that there is a reliable domestic
supply chain.
The executive said that Nvidia was selling brains and a nervous
system to its customers, so that the intelligence generated can then
be applied to their businesses in ways that create new products and
identify new savings and business lines. That could allow
manufacturers that depend on foreign suppliers to restore production
in the U.S., taking an AI that so far has largely been accessed on
laptops onto factory floors where it can, in their words, “move
atoms.”
The possibility has not been lost on Trump, who sees the industry as
essential to American greatness.
“It’s an amazing industry,” Trump said to reporters last week. “It’s
bigger than any industry anyone’s ever seen. We are leading China by
a lot. And whoever leads that is going to really lead the world to a
large extent, that’s how big it is.”
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