Key Points
- Alphabet Reveals Holding of Nearly $548 Million in Qualcomm Shares
- Google Ventures acquired Modular through a Qualcomm acquisition to obtain the relevant shares.
- Qualcomm aims for $15 billion in annual data center revenue
Google's parent company, Alphabet, disclosed holdings of Qualcomm shares worth $548 million, which gives this tech giant access to another emerging competitor in the field of artificial intelligence computing; this competition is intensifying as NVIDIA faces challenges from custom chip developers.
According to a document submitted to the U.S. Securities and Exchange Commission on November 6th by Alphabet, as of September 30th, the company held 2.98 million Qualcomm shares with a market value of 547.9 million US dollars. This position was managed by Google Ventures, the venture capital department of Alphabet.
Google $54.8 billion in holdings from Qualcomm's AI software acquisition
Qualcomm completed the acquisition of Modular on July 28th and issued approximately 18 million shares as part of the transaction.
According to Qualcomm's latest annual report, the accounting purchase price for this transaction is approximately $2.6 billion. The software developed by Modular enables the AI model to run efficiently across different hardware architectures.
As customized AI chips pose a challenge to NVIDIA's existing GPU ecosystem, this capability may become increasingly valuable.
Unlike NVIDIA's CUDA platform, which is highly integrated with NVIDIA hardware, the technology behind Modular is designed to support a variety of computing architectures.
Therefore, the Qualcomm shares held by Google Ventures represent an indirect exposure to a company that is expanding its AI infrastructure business; however, Alphabet has not categorized this holding as a strategic investment directly aimed at data center processors.
Qualcomm aims for a $15 billion target, while NVIDIA faces more competition from AI chips
As Qualcomm actively expands into artificial intelligence data center businesses beyond smartphones, this revelation has also followed.
In the investor presentation in June, Qualcomm set a goal to achieve annual data center revenue of over $15 billion and non-smartphone business revenue of $40 billion by the fiscal year 2029.
In its financial report announcement on November 4th, the company reiterated its target of achieving $5 billion in data center revenue for the fiscal year 2027.
Large cloud service providers are increasingly seeking alternatives to NVIDIA processors, including internally developed chips as well as custom accelerators optimized for specific workloads.
Google is advancing its own TPU expansion, and its broader collaboration with Marvell may also bring considerable revenue through customized AI infrastructure.
Qualcomm is entering the same competitive environment through its Dragonfly processor family, custom chip solutions, and Modular software platform.
Qualcomm's smartphone business is declining, making the expansion of AI even more important.
Qualcomm's AI layout comes at a time when its traditional smartphone business is under pressure.
The company's revenue in the fourth fiscal quarter decreased by 8% to $10.32 billion; among this, revenue from chips related to mobile phones fell by 26% to approximately $5.14 billion.
On November 5th, after announcing smartphone business results that fell short of expectations and facing broader selling in technology stocks, Qualcomm's stock price dropped by more than 9%, although it later rebounded during trading on Friday.
The company is also seeking other revenue opportunities, including the recent announcement of a partnership with SpaceX to support the US network expansion planned for Starlink Mobile.
