Chip Giants Arm and Qualcomm Pursue Alphawave for AI Advancement

British chip designer Arm Holdings (NASDAQ:ARM) had contemplated acquiring semiconductor intellectual property supplier Alphawave to enhance its artificial intelligence (AI) processor technology.

However, after initial talks, discussions fell through, and no acquisition took place.

Qualcomm Inc (NASDAQ:QCOM), a competing firm, also expressed interest in acquiring Alphawave, according to reports from Reuters. Both Arm and Qualcomm are in pursuit of serializer-deserializer technology, which has already helped companies like Broadcom Inc (NASDAQ:AVGO) secure AI chip contracts with giants like Alphabet Inc’s (NASDAQ:GOOGL) Google and OpenAI.

This serializer-deserializer technology has become fundamental in enabling applications such as chatbots to function optimally, as it allows for the simultaneous connection of thousands of chips.

Arm has seen its chipsets grow increasingly popular within cloud computing sectors, particularly as the demand for AI in data centers has surged. The company anticipates that its data center central processing unit (CPU) market share will rise to approximately 50% by the end of 2025, a significant jump from around 15% in 2024.

Both Arm and Qualcomm provide essential data center CPUs to various enterprises.

It has also been reported that Arm is considering raising its prices by up to 300% and is discussing the possibility of manufacturing its own chips. The firm aims to increase its annual revenue from smartphone sales by roughly $1 billion over the next decade.

Currently, Arm is majorly owned by the Japanese conglomerate SoftBank Group and commands over 90% of the mobile applications market. Moreover, according to Statista, Arm accounted for a 65% share of global Internet of Things and embedded computing markets in 2022.

Price Action: As of the latest data, ARM shares are down by 0.13% trading at $106.84.

Also Read:

• SoftBank Examines $16.5 Billion Loan That Could Support OpenAI’s $40 Billion Fundraising: Report

Image: Shutterstock

Chip, Technology, AI, Investment