Qualcomm Inc. has struck a significant agreement with ByteDance Ltd., the owner of TikTok, to supply millions of custom artificial intelligence chips for data centers, marking a major milestone in the U.S. chipmaker’s efforts to expand beyond its traditional smartphone dominance into the high-growth AI infrastructure market.

Bloomberg made the report, citing people familiar with the matter. Under the deal, ByteDance will procure large volumes of Qualcomm’s application-specific integrated circuits (ASICs) to power its AI agent software and support the rapid expansion of its artificial intelligence capabilities.

The deal positions Qualcomm as one of ByteDance’s key suppliers in this critical area and provides the San Diego-based company with a high-profile, high-volume customer in China’s booming AI sector.

Qualcomm shares surged as much as 8.3% on the news, hitting a new intraday record and reflecting strong investor enthusiasm for the company’s progress in diversifying its revenue streams. The move validates CEO Cristiano Amon’s strategy to grow Qualcomm’s presence in AI computing, an area long dominated by Nvidia but increasingly contested by rivals including AMD, Broadcom, and Google.

Amon had hinted at growing momentum during the company’s last earnings call, mentioning “engagement” with several potential customers without naming them. The ByteDance partnership now provides concrete evidence of that pipeline materializing.

For Qualcomm, the deal is more than just a revenue opportunity — it represents validation of its push into custom AI silicon. The company has long been a leader in mobile processors but has faced challenges breaking into the data center and AI accelerator space, where Nvidia holds overwhelming market share. This agreement gives Qualcomm a foothold with one of the world’s most aggressive AI spenders and could open doors to additional hyperscale and cloud customers.

Manufacturing the chips through partners like Taiwan Semiconductor Manufacturing Co. (TSMC) gives Qualcomm the leverage to navigate existing U.S. export restrictions on advanced AI technology to Chinese firms, as long as the chips meet legally acceptable performance thresholds. This structure allows Qualcomm to participate in the Chinese market without running afoul of sanctions, while still capturing significant value.

Meanwhile, ByteDance’s commitment underscores its enormous ambitions in artificial intelligence. The company recently increased its AI infrastructure budget by 25% to 200 billion yuan ($29.4 billion), according to the South China Morning Post. Its Doubao chatbot, China’s most-downloaded AI application for much of last year, competes directly with global leaders like OpenAI’s ChatGPT, Anthropic’s Claude, and Google’s Gemini.

The Qualcomm chips are expected to help ByteDance accelerate its AI agent development and scale its data center operations. The deal also allows ByteDance to convert its in-house chip designs into production-ready semiconductors, leveraging Qualcomm’s expertise and manufacturing relationships.

However, the partnership highlights the shifting dynamics in the global AI chip supply chain. While Nvidia remains the undisputed leader, companies like ByteDance are actively seeking alternatives and building domestic capabilities to reduce reliance on any single supplier. For Qualcomm, this represents a strategic entry point into a market projected to grow exponentially as AI adoption spreads across industries.

The deal is also seen as part of China’s continued heavy investment in AI despite U.S. restrictions. ByteDance and other Chinese tech giants are pouring billions into data centers, models, and infrastructure, creating substantial demand for chips that can be legally supplied under current export rules.

Analysts see this as a positive development for Qualcomm’s long-term positioning. Success with ByteDance is expected to lead to further design wins and help the company build credibility in the AI infrastructure space. However, challenges remain, including intense competition, geopolitical risks, and the need to prove performance and efficiency against established players like Nvidia.

Additionally, the agreement illustrates how even strict export controls are prompting creative workarounds and accelerated innovation in the wider semiconductor industry. It also reinforces the strategic importance of partnerships between chip designers, foundries, and end customers in navigating a fragmented global market.

Overall, Qualcomm’s breakthrough with ByteDance adds momentum to its diversification story at a time when smartphone growth has matured. Deals like this are expected to become increasingly important drivers of revenue and valuation for companies seeking to expand beyond traditional markets.

Therefore, this partnership is touted to mark the beginning of a more significant chapter in Qualcomm’s evolution from mobile chip leader to broader AI infrastructure player, especially as spending continues to surge worldwide.

Cerebras CEO Andrew Feldman is pushing back against the narrative of AI as an extractive force on communities, arguing that data centers, the massive facilities powering the AI boom, can and should be built in ways that deliver tangible benefits to the towns and cities that host them, rather than imposing hidden costs.

In a recent episode of Harry Stebbing’s “20VC” podcast, first published by Business Insider, Feldman, fresh from leading his AI chip company through a blockbuster IPO, criticized the industry for poor communication and execution around data center development. He pointed to Microsoft President Brad Smith’s “Building Community-First AI Infrastructure” plan as a model worth emulating.

“These can be clean, they can make jobs, they can be good for communities,” Feldman said. “We can do this thoughtfully.”

Feldman emphasized that AI companies need to approach communities with a mindset of partnership rather than imposition. He suggested practical, low-cost ways to integrate data centers into local life.

“There’s no reason why we can’t add these to communities and have the community benefit from it. And we have to do some thinking, we have all the heavy equipment out there — build a football field for the local school, build a school, add a church or a synagogue to the community. We can be good neighbors at very, very low cost,” he said.

Data Centers as Community Assets, Not Burdens

Feldman stressed that data centers must be better stewards of local resources, with companies footing the bill rather than shifting costs onto taxpayers. He criticized past practices where firms relied on outdated financial arrangements or excessive water usage.

In an email to Business Insider, he elaborated: “In some cases, they tried to pawn off costs on the local community or use outdated financial arrangements that left the community holding the bag. And in others they were wasteful of resources. This is not cool. And none of this needs to be the case.”

One practical solution he advocated is building closed-loop cooling systems to dramatically reduce water consumption. This is particularly relevant given that, according to a Business Insider report from last June, 40% of the nation’s planned and existing data centers are located in some of the most water-stressed areas in the U.S.

By following Smith’s framework, which includes paying its own way to avoid raising local electricity prices, reducing water consumption, creating jobs, and partnering with nonprofits and universities on training programs, the industry can shift public perception from skepticism to support. Smith himself noted the historical parallels.

“Whether it was canals, railroads, the electrical grid, or the interstate highway system, each era produced its own conflicts over who bore the burdens of progress. One enduring lesson is that successful infrastructure buildouts will only progress when communities feel that the gains outweigh the costs,” he said.

Addressing AI Washing and the Real Productivity Challenge

Feldman also tackled the growing public concern over AI-driven job displacement. A March Quinnipiac University poll found that 7 out of 10 Americans believe advancements in AI will lead to fewer job opportunities. He pushed back against what he sees as “AI washing” — companies blaming layoffs on the technology when the real drivers are often post-COVID over-hiring and productivity gains that are only now being realized.

“I think to date, most of the layoffs were ‘AI-washed.’ They were because we did boneheaded hiring during COVID. It is actually because a great deal of productivity gains have occurred over the years that we’re just now harvesting,” he said.

At Cerebras, the focus is on using AI to make engineers vastly more productive, not to reduce headcount. Feldman said the company wants to hire more talent, not fewer.

“If you are an engineering organization that can’t see how to take advantage of vastly more productive engineers, I don’t think you’re long for this world. I mean, the list of things I want our engineers to do is 50 times as much as we have engineers,” he said.

This perspective reframes AI not as a job destroyer but as a multiplier of human capability — provided companies invest in training and thoughtfully integrate the technology.

Feldman’s message comes at a pivotal time. As data centers proliferate to meet the enormous computational demands of modern AI, public and regulatory scrutiny is intensifying. Communities are increasingly wary of noise, water usage, energy consumption, and limited local economic benefits. By advocating for a more community-oriented approach, Feldman is attempting to shift the conversation from fear of disruption to shared opportunity.

His stance also reflects a maturing industry awareness: the AI boom’s long-term success will depend not only on technological breakthroughs but on social license and sustainable deployment. Companies that treat data centers as extractive operations risk backlash, while those that integrate thoughtfully could build lasting goodwill and smoother expansion paths.

Analysts at Goldman Sachs have raised their year-end 2026 target for the S&P 500 to 8,000 from 7,600, becoming the latest major Wall Street firm to argue that the artificial intelligence investment boom is strong enough to keep driving U.S. equities higher despite mounting geopolitical and inflation risks.

The new forecast implies another 6.4% upside from the index’s latest close of 7,519.12 and supports the increasingly dominant view among large banks that corporate earnings, rather than monetary easing, are now the primary engine behind the market rally.

“Earnings growth has powered the entire S&P 500 return so far this year, and we expect this dynamic to continue in the coming months,” Goldman analysts wrote in a note Tuesday.

The bank also sharply increased its earnings projections for U.S. companies, forecasting S&P 500 earnings per share of $340 in 2026, representing roughly 24% annual growth, followed by another 13% increase to $385 in 2027.

The upgraded outlook highlights how rapidly Wall Street expectations have shifted around artificial intelligence and its impact on corporate profitability. Only months ago, investors were focused primarily on recession risks, elevated interest rates, and geopolitical instability stemming from the war involving the United States, Israel, and Iran. Now, many strategists increasingly believe the scale of AI-related spending is large enough to offset broader economic weakness.

Goldman said companies tied directly to AI infrastructure, particularly semiconductor firms and data center suppliers, are expected to generate roughly half of the S&P 500’s total earnings growth this year.

That reflects the extraordinary concentration now shaping U.S. equity markets.

A relatively small group of AI-linked companies, including major chipmakers, hyperscalers, and cloud infrastructure providers, has increasingly become responsible for a disproportionate share of market gains. Massive capital expenditures by technology giants on AI servers, chips, networking equipment, and energy infrastructure continue flowing through supply chains at a pace analysts say remains historically unusual.

The bank noted that semiconductor stocks “at the heart of the AI infrastructure complex” have recently been outperforming even their already rapidly rising forward earnings estimates. That observation significantly suggests investors are not simply rewarding current profits, but are increasingly pricing in expectations that AI spending could continue accelerating for years.

The optimism comes as corporate America embarks on one of the largest infrastructure buildouts in decades. Companies including Nvidia, Advanced Micro Devices, Microsoft, Amazon, and Alphabet are collectively spending hundreds of billions of dollars on AI computing infrastructure, data centers, and custom chips.

That investment wave has extended far beyond Silicon Valley, boosting demand for energy producers, utilities, networking firms, server manufacturers, memory-chip makers, and industrial suppliers.

Goldman’s call adds to a broader pattern of increasingly bullish forecasts from Wall Street firms. Last week, UBS also raised its market outlook, arguing that AI-related earnings growth could help absorb the impact of stubborn inflation, supply-chain disruptions, and elevated oil prices tied to the Iran conflict.

The bullishness persists even as several macroeconomic risks continue building beneath the surface. Oil prices remain far above pre-war levels due to disruptions around the Strait of Hormuz, keeping pressure on transportation, manufacturing, and consumer costs globally. Inflation concerns have also altered expectations for Federal Reserve policy, with traders recently increasing bets that the central bank may still raise interest rates again rather than cut them.

At the same time, economists continue warning that the broader U.S. economy outside the technology sector appears considerably weaker than headline market indexes suggest. Consumer spending growth has slowed, borrowing costs remain elevated, and several sectors tied to housing, retail, and manufacturing continue showing signs of strain. Market gains have also become increasingly concentrated among large-cap technology and AI-related stocks, raising concerns about valuation risk.

Goldman acknowledged some of those vulnerabilities, noting that weak consumer demand and higher operating costs still pose threats to earnings growth. Yet the bank argued that the scale of AI investment is currently overwhelming those concerns.

The revised forecasts suggest Wall Street increasingly views AI not simply as another technology trend, but as a structural economic transformation capable of sustaining corporate profit growth even during periods of geopolitical instability and tighter monetary policy.

That belief has become the defining force behind the current bull market. Investors are effectively betting that the race to dominate artificial intelligence infrastructure will continue generating enough revenue, productivity gains, and capital spending to support U.S. equities well into the end of the decade.

Fresh doubts are emerging on Wall Street over the growing optimism that the United States and Iran are close to ending a conflict that has already rattled global energy markets, disrupted shipping flows, and revived fears of another inflation shock for the world economy.

While markets initially rallied after President Donald Trump said over the weekend that a deal with Iran had been “largely negotiated,” analysts at Piper Sandler warned clients that expectations of a quick reopening of the Strait of Hormuz may be dangerously premature. In a note to investors, the bank’s energy and macroeconomic teams argued that the vital shipping lane is likely to remain “largely closed for months,” a scenario they believe could send oil prices to fresh highs later this summer.

“We think the Strait of Hormuz remains largely closed for months yet, meaning shortages become more urgent and oil hits new highs this Summer,” a recent note from the investment bank’s energy and macro teams said.

The warning comes as mixed signals continue to emerge from Washington and Tehran. U.S. military officials confirmed that American forces carried out what they described as “self-defense strikes” in southern Iran, targeting missile launch sites and vessels allegedly laying mines near the Strait of Hormuz. The operation underscored how fragile diplomatic efforts remain even as negotiations continue behind the scenes.

Trump had earlier struck a more optimistic tone, saying on Truth Social that an agreement with Iran had been substantially negotiated and that details would soon follow. But Iranian officials have simultaneously warned that maritime access through the strategically critical waterway “will have costs,” reinforcing concerns that Tehran still sees the strait as leverage in negotiations.

The contradictory messaging has left investors struggling to determine whether the region is moving toward de-escalation or a more entrenched economic confrontation.

The Strait of Hormuz remains one of the world’s most important energy chokepoints, historically handling roughly one-fifth of global seaborne oil shipments alongside major volumes of liquefied natural gas exports from Gulf producers. Countries across Asia, Europe, and the Middle East depend heavily on uninterrupted flows through the narrow passage.

Shipping data has already shown vessel traffic collapsing to near-zero levels after the conflict intensified, creating mounting concerns about supply shortages if disruptions persist into the second half of the year.

Piper Sandler said it has “very little confidence” that commercial traffic through the Strait will recover even to half of pre-war levels in the near term. The bank argued that Washington appears reluctant to escalate militarily because a wider confrontation could destabilize neighboring Gulf states and deepen global supply chain disruptions.

The firm also suggested Iran’s leadership sees little incentive to compromise quickly because elevated oil prices and shipping disruptions strengthen Tehran’s bargaining position. That assessment contrasts with the recent rebound in global equities, where investors have increasingly bet that diplomacy would ultimately prevail.

Oil prices themselves illustrate the market’s uncertainty. U.S. benchmark West Texas Intermediate crude surged toward $120 a barrel during the early phase of the conflict before retreating to around $94 as hopes for negotiations improved. Piper Sandler now believes another leg higher is increasingly likely if shipping disruptions persist.

Such a move would carry major implications far beyond the energy sector.

Higher crude prices are already feeding into gasoline and transport costs globally, complicating central bank efforts to contain inflation. In the United States, rising fuel prices have become a growing political concern ahead of the 2026 midterm elections, particularly after inflation had shown signs of easing earlier this year.

The Federal Reserve now faces a more difficult balancing act. Markets that previously expected multiple rate cuts in 2026 have sharply revised those assumptions as energy-driven inflation risks intensify. Bond markets have also become increasingly volatile as investors reassess the likelihood of prolonged higher interest rates.

The broader economic threat extends into manufacturing, aviation, logistics, and consumer spending. Europe and Asia remain particularly vulnerable because many economies rely heavily on Middle Eastern energy imports routed through Hormuz.

Analysts say even a full reopening of the waterway may not immediately normalize markets because insurers, shipping firms, and commodity traders are likely to continue pricing in elevated geopolitical risks for months.

The conflict has also revived debate over the vulnerability of global trade routes and the concentration of energy infrastructure in geopolitically unstable regions. Several governments are already accelerating discussions around strategic petroleum reserves, alternative shipping corridors, and long-term energy diversification plans.

For investors, the central question is no longer simply whether a diplomatic agreement can be reached, but whether any deal would be strong enough to restore confidence in one of the world’s most critical trade arteries.

At the moment, Piper Sandler appears unconvinced.