Nvidia’s Vietnam deal: a game changer or just noise?

In Vietnam, Google Trends –  a feature that shows what people are searching for online in real time – is usually dominated by lottery results and football matches. But Nvidia, the US$3.3 trillion chipmaker fueling the AI boom, cracked the top searches earlier this month after its CEO Jensen Huang visited Hanoi to finalize a deal Vietnam had been eagerly anticipating.

Nvidia founder and CEO Jensen Huang accepted the 2024 VinFuture prize in Vietnam on December 6. / Photo credit: VinFuture

Huang sat down for a casual street beer with Vietnam’s Prime Minister Pham Minh Chinh after the US-based company officially committed to establish its first R&D center in the country and acquired VinBrain for an undisclosed amount. The acquisition of the Vingroup-backed AI startup confirmed months of speculation about the move. 

As the dust settles, attention has turned to Nvidia’s reasons for acquiring VinBrain and its impact on Vietnam’s tech scene.

Why VinBrain?

The startup was founded in 2019 by Steven Truong, a veteran engineer who worked at Microsoft. Vingroup’s most recent audited financial statements show that before the deal, it held a nearly 50% stake in VinBrain.

VinBrain, along with carmaker VinFast and smartphone unit VinSmart (which was shut down in 2021), was part of Vingroup’s ambitious push into technology and manufacturing. Despite offloading VinBrain to Nvidia, the conglomerate continues to retain VinAI, which specializes in generative AI.

VinBrain’s main product, DrAid, uses computer vision to enhance imaging diagnostics. According to the company, around 200 hospitals – mostly in Vietnam – have adopted the product. DrAid was also the first AI-powered X-ray diagnostic tool from Southeast Asia to earn certification from the US Food and Drug Administration (FDA).

VinBrain CEO and founder Steven Truong/ Photo credit: VinBrain

Like other Vingroup subsidiaries, VinBrain has obviously benefited from the conglomerate’s ecosystem, which includes Vinmec hospitals nationwide. But the country’s relatively lax data privacy regulations also helps VinBrain, an industry expert with close ties to Vingroup notes. Collecting patient data is relatively easier in Vietnam compared to other developed countries, the source added.

However, VinBrain is still a loss-making startup after operating for five years. 

Its revenue doubled in 2023 to US$477,000 while its losses narrowed by 23% to US$3 million, according to data from WiGroup, a financial data provider. Over the past four years, VinBrain has accumulated nearly US$12.9 million in net losses, more than half of its registered capital of US$24.7 million.

That’s unlikely to be a major concern for Nvidia, as the VinBrain deal has strengthened its ties with the Vietnamese government and the country’s largest conglomerate.

Although Vingroup didn’t formally announce the VinBrain deal, it awarded the VinFuture Grand Prize a day later to Huang and alongside four AI professors for their contributions to deep learning.

Uncertainties abound 

Cautious optimism