Taiwanese chip designer MediaTek is set to begin mass production of its first custom artificial intelligence accelerator for data centers late this year, pushing deeper into the booming AI infrastructure market.

The company expects its data center business to gain momentum over the next couple of years, with related revenue projected to surpass $2 billion this year. Growth is driven by rising demand from major cloud and tech companies seeking customized AI computing solutions, said Chief Executive Rick Tsai during an earnings call Friday.

Although MediaTek did not identify customers, analysts and investors widely associate its custom AI accelerator business mainly with Google.

References to a first-generation accelerator already delivering strong economics and a second-generation of that chip suggest a deepening role in next-generation Google AI hardware program, according to TF International Securities analyst Ming-Chi Kuo.

MeditaTek said the second-generation of that AI chip is progressing toward mass-production in 2028.

Encouraged by stronger product competitiveness and customer interest, MediaTek raised its 2027 market share target in the data center business to 15% to 20%, up from 10% to 15%. Analysts expect more meaningful revenue growth to emerge later this year as Google-related programs ramp up.

MediaTek is also expanding beyond data centers. Its advanced mobile processors designed for autonomous smartphone AI features will arrive in the third quarter, while a computing system developed jointly with Nvidia for Agentic AI is expected by the end of the year.

Responding to questions regarding a leading LLM developer-widely speculated to be OpenAI-Tsai declined to address specific companies, noting instead that multiple AI hardware formats are being explored across the industry, though it remains unclear which format will dominate.

Regardless of which format dominates, Tsai said MediaTek's power-efficient, high-performance central processing chips position it well to support a wide range of AI-enabled devices.

These moves highlight a major pivot for MediaTek from its roots in consumer electronics. Pushed beyond handsets by a persistent smartphone slump, the company is now taking on U.S. chip designers like Broadcom in the custom AI chip market.