Alphabet Builds $548 Million Stake in Qualcomm, Boosting Chipmaker’s AI Ambitions

Alphabet has acquired a stake worth nearly $548 million in longtime technology partner Qualcomm during the third quarter, strengthening the chipmaker’s efforts to expand its presence in the data centre and artificial intelligence markets. Qualcomm shares rose 3% in premarket trading on Friday, recovering slightly after falling more than 9% on Thursday following disappointing September-quarter results and a broader market selloff. The investment comes at a challenging time for the smartphone industry, which is experiencing one of its steepest downturns.

Google and Qualcomm have maintained a longstanding partnership, with Qualcomm processors powering smartphones running Google’s Android operating system. The companies have also collaborated on Google’s premium Googlebook laptop range, which uses Qualcomm processors, and entered into an agreement in 2024 to develop chips and software supporting artificial intelligence adoption in the automotive industry. Qualcomm is now looking beyond smartphones to strengthen its position in the rapidly expanding AI infrastructure market, developing custom AI processors for cloud service providers seeking alternatives to Nvidia’s expensive chips.

Qualcomm expects its data centre chip revenue to reach $15 billion by 2029 as it expands partnerships with major technology companies. In September, Amazon signed an agreement to purchase up to $60 billion worth of Qualcomm’s AI data centre chips and related products, alongside receiving warrants to purchase Qualcomm shares. Microsoft and Meta have also placed orders for its data centre processors. Meanwhile, Alphabet disclosed a modest increase in its investment in Elon Musk’s SpaceX, raising its holding to approximately 555 million shares from 551.2 million previously.

Pic Courtesy: google/ images are subject to copyright