Nov 6 (Reuters) - 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% in premarket trading. They had tumbled more than 9% 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 seek alternatives to Nvidia's costly chips.
The chipmaker expects its data-center chip revenue to hit $15 billion by 2029. In September, Qualcomm struck a deal with Amazon, allowing the tech giant to buy up to $60 billion of its AI data-center chips and related products while issuing warrants for Amazon to purchase its stock.
Big Tech companies Microsoft and Meta have also backed Qualcomm's push with orders for its data center processors.
Google on Friday also reported a small increase in its position in Elon Musk's SpaceX to about 555 million shares from 551.2 million earlier.
Reporting by Deborah Sophia in Bengaluru; Editing by Arun Koyyur
Source: Reuters