Qualcomm is spiking after a Bloomberg report that the chip company is poised to sell “millions” of AI chips to TikTok owner ByteDance.
The report, citing people familiar with the matter, said these custom processors would be used to “support the social media company’s AI agent software.”
Qualcomm had come under pressure earlier this year because of softness in its China handset business in light of difficulty accessing memory chips, which are in a severe supply crunch. At one time, the company had seemingly been counting on supporting AI-enabled devices to earn its role in the boom — and still might be doing that, with analysts speculating over a potential partnership with OpenAI for an AI smartphone chip.
But it’s also been telegraphing a shift toward playing a bigger role upstream in providing hardware for data centers.
In the press release that accompanied Qualcomm’s recent earnings report, President and CEO Cristiano Amon touted the company’s entry into the data center business, with initial shipments to a “leading hyperscaler” on track for later this year, and said that investors could expect to hear more on Qualcomm’s growth plans in data center and physical AI at its Investor Day on June 24.
Seems like they’re on track.