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Alphabet takes $548 million stake in partner Qualcomm in data center push

By · Published by Everything Blog

In short

The third-quarter financial backing aligns with Qualcomm's aggressive efforts to supply custom artificial intelligence processors to hyperscale cloud providers. Qualcomm is positioning its hardware as a cost-effective alternative to market-leading Nvidia components, targeting $15 billion in data-center revenue by 2029. Backing from major clients like Microsoft, Meta, and an up to $60 billion purchase pact with Amazon reinforces this transition. Meanwhile, Alphabet also marginally expanded its equity position in SpaceX.

Key points

  • Qualcomm is actively expanding into artificial intelligence data centers to counter a ste…: Qualcomm is actively expanding into artificial intelligence data centers to counter a steep downturn in the mobile phone sector.
  • Major technology firms including Meta, Microsoft, and Amazon are tapping Qualcomm as an a…: Major technology firms including Meta, Microsoft, and Amazon are tapping Qualcomm as an alternative to expensive Nvidia chips.
  • Alphabet is broadening its tech investments, pairing its Qualcomm position with an expand…: Alphabet is broadening its tech investments, pairing its Qualcomm position with an expanded stake of roughly 555 million shares in SpaceX.

Sources checked by our analysis pipeline: 1

Nov 6 : Alphabet built a stake worth nearly $548 million in longtime partner Qualcomm in the third quarter, giving a boost to the chipmaker's efforts to expand into data centers as the smartphone market sees one of the worst downturns.

Qualcomm shares rose 3 per cent in premarket trading. They had tumbled more than 9 per cent on Thursday after disappointing September-quarter results and a broader selloff triggered by a Democratic win in the US midterm elections.

Qualcomm's chips have long powered virtually all major smartphones with Google's Android operating system.

More recently, the companies collaborated on Google's new premium laptop line-up, Googlebook, that runs on processors from Qualcomm. They also struck an agreement in 2024 to build chips and software for AI adoption in the automotive industry.

The Google stake comes as Qualcomm ramps up its efforts to expand its nascent data-center business in its push to become a major supplier to the AI infrastructure boom.

Qualcomm has spent the past year courting cloud service providers with custom AI processors as companies focus on developing chips in-house and…

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