SHERMAN, Texas -- 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 is formally unveiling on Tuesday 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.

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.

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.

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.

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.

“This investment expands America’s capacity to manufacture critical AI-enabling technologies, creates high-value jobs, and reinforces U.S. leadership in advanced manufacturing, photonics, and innovation,” said Coherent CEO Jim Anderson in a statement.

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.”