(Bloomberg) — MediaTek Inc. (2454.TW) reported a 44% surge in monthly sales, boosted by its emerging AI chip business from the likes of Alphabet Inc.’s Google (GOOG).

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Revenue in August rose to NT$64.2 billion ($2 billion). Analysts on average are looking for 10% sales growth in the current quarter.

The Taiwanese chipmaker is gaining momentum ahead of plans to start mass production of its first AI chip customized for a major US cloud service provider in the fourth quarter. Analysts said the customer, which MediaTek has not named, is Google.

The nascent AI business is helping the company offset a downturn in the Android smartphone market, where it competes with US-based Qualcomm Inc. for mobile processor orders.

MediaTek has also won backing from Nvidia Corp. (NVDA) and Alphabet, shoring up its standing in the emerging field. The two US companies participated in the Taiwanese chipmaker’s recent bond sale, with Nvidia chipping in as much as $3.5 billion.

MediaTek already works with Nvidia on the US chipmaker’s effort to get into the laptop industry. The Taiwanese company is helping with Nvidia’s RTX Spark product for that market.

What Bloomberg Intelligence Says

Nvidia’s $3.5 billion purchase of MediaTek convertible bonds materially lowers funding risk for MediaTek’s AI ASIC expansion, financing much of the $5 billion framework approved July 31 to secure supply and move from chips into full systems. Access to Nvidia technology such as NVLink Fusion also strengthens MediaTek’s position against Broadcom and Marvell by easing integration of its custom AI chips into Nvidia-based data centers. The strategic cost is neutrality. MediaTek hasn’t named its flagship ASIC customer, though reports have linked it to Google’s TPU program, a direct Nvidia alternative. Nvidia’s role as a major financier may weaken MediaTek’s appeal to hyperscalers seeking independence from Nvidia.

-Charles Shum, analyst

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The Taiwanese firm previously said it expects AI chip sales to reach about $2 billion this year and targets 15% of the $80 billion segment next year. MediaTek has also said it plans to hire aggressively to better capture business opportunities related to AI spending.