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LG Electronics’ latest partnership with Google on automotive AI and software-defined vehicle technology sparked a strong market reaction as investors increased bets on the future of connected mobility.

The shift toward software-defined vehicles is rapidly changing the global automotive industry.

For years, carmakers relied heavily on traditional suppliers for hardware such as displays, dashboards and electronics. That model is evolving fast. Today, vehicles are increasingly being built like digital platforms—powered by software, connected services and artificial intelligence.

That transformation was in focus this week after LG Electronics introduced a new range of automotive technologies developed with Google’s software and AI tools.

The South Korean technology giant unveiled advanced in-vehicle infotainment and software-defined vehicle solutions based on Android Automotive OS and Google’s artificial intelligence platform. The announcement triggered an immediate response from investors, sending LG Electronics shares up 24%.

The sharp rise reflects growing confidence that automotive software could become one of LG’s most important long-term growth businesses.

Software-defined vehicles are becoming the industry’s next major battleground

Automakers around the world are investing heavily in software as cars become smarter and more connected.

Features such as voice assistants, digital navigation, AI-powered dashboards and over-the-air software updates are no longer limited to premium electric vehicles. They are increasingly moving into mainstream cars as manufacturers compete to improve customer experience and unlock new recurring revenue streams.

According to McKinsey, the global automotive software and electronics market could cross $460 billion annually by 2030, driven by rising demand for autonomous systems, digital cockpit features and connected mobility services.

That growth is changing how suppliers compete.

Electronics companies that once focused mainly on hardware are now building software ecosystems. Partnerships between manufacturers and technology companies are becoming more important as vehicle platforms grow more complex.

LG has steadily expanded its automotive electronics business over the past few years. The company has made mobility one of its core growth areas while increasing investment in EV charging, connected vehicle systems and next-generation automotive components.

Its latest Google-backed product launch fits directly into that broader strategy.

Why investors reacted strongly

Unlike a traditional earnings announcement or acquisition, LG’s latest move was driven by product development and strategic partnership momentum.

The company introduced automotive solutions built with Google that include Android Automotive OS-based infotainment systems and software-defined vehicle technologies capable of operating multiple cockpit displays through a single system-on-chip architecture.

That matters because automakers increasingly want fewer hardware layers and more integrated digital systems.

Instead of developing every software layer internally, many car manufacturers are now looking for ready-to-deploy solutions that combine navigation, entertainment, AI and connectivity in one platform.

LG’s new offerings aim to address that need.

The company also highlighted that the technologies received strong interest from Google and global automakers, adding to investor optimism around future commercial partnerships.

Markets appear to be viewing the development as more than a product showcase.

Automotive software contracts typically run over multiple years and become deeply integrated into vehicle platforms. Once a supplier is embedded into a model lineup, the revenue opportunity often extends through software support, updates and future expansion.

That creates a stronger long-term business model than one-time hardware sales.

For investors, the Google partnership strengthened the view that LG could capture a larger share of the fast-growing connected vehicle market.

LG’s automotive business is moving beyond hardware

LG’s traditional strength has long been consumer electronics.

But the automotive business follows a different model.

Instead of selling products through retail, LG works directly with automakers and suppliers under long-term contracts tied to vehicle production cycles.

That provides greater visibility and stronger customer relationships.

The company’s automotive technology business includes digital displays, infotainment systems and vehicle components. The Google partnership expands that offering into software-defined vehicle infrastructure and AI-driven cockpit experiences.

This combination gives LG a strong position.

Google brings software, AI tools and Android Automotive.

LG contributes display technology, automotive electronics expertise and large-scale manufacturing capability.

Together, that creates an integrated platform for connected vehicles.

The company also showcased systems designed to control multiple vehicle displays from a single chip—an approach that can reduce engineering complexity and lower costs for automakers.

As software becomes a bigger part of the driving experience, that type of integration is becoming more valuable.

Competition is intensifying globally

LG is not alone in targeting automotive software.

Germany’s Bosch continues to expand its digital cockpit and mobility software business.

US chipmaker Qualcomm has strengthened its automotive presence through Snapdragon-powered cockpit systems and vehicle software platforms.

Taiwan’s Foxconn has also increased its EV and automotive technology ambitions.

LG’s advantage lies in its ability to operate across both hardware and software.

It has long-standing expertise in consumer display technology while also building automotive-grade electronics.

The Google relationship adds another layer by connecting LG to one of the world’s largest software ecosystems.

Regional demand is also shaping competition.

The US remains a major market for connected vehicles and software-driven mobility.

Europe continues to adopt digital vehicle platforms while balancing regulation and safety standards.

Across Asia, including India, demand for connected car technology is rising as automakers expand digital cockpit offerings.

That creates a broad opportunity for companies with scalable automotive platforms.

What this means for the sector

LG’s share rally highlights a larger trend in global markets.

Investors are increasingly rewarding companies that combine hardware manufacturing with AI and software monetization.

That shift is visible across automotive, robotics and industrial technology.

Big technology partnerships are also becoming central to growth.

Google contributes software infrastructure and AI capability.

LG provides industrial execution and vehicle integration.

That combination reflects how innovation is increasingly being built through partnerships rather than by a single company alone.

For the broader economy, software-defined vehicles are expected to drive spending across semiconductors, AI systems and mobility infrastructure over the next decade.

And for investors, LG’s latest move reinforces a growing view: companies positioned at the intersection of artificial intelligence and real-world industrial applications may capture some of the strongest long-term opportunities in global technology.

The automotive market may still be early in this transition.

Pasqal and LG Electronics Form Strategic Alliance to Promote Industrial Uses.

Pasqal and LG Quantum

Today, LG Electronics, the world leader in consumer electronics and appliances, and Pasqal, Europe's top neutral atom quantum computing enterprise, announced a strategic agreement that changed the deep technical landscape. LG Electronics invested in this alliance, which advances quantum computing in industrial applications. LG Electronics invested in Pasqal again to support the alliance.

Pasqal's neutral atom quantum computing hardware and LG's industry expertise are collaborating. The key goals of this alliance are to establish both enterprises as leaders throughout the quantum value chain and promote quantum computing commercialisation. Quantum computing, which employs quantum mechanics to do complex tasks tenfold faster than traditional computers, is influencing several industries.

Investment Drives Quantum Cooperation

The new partnership focused on R&D and investment. LG Electronics' Pasqal stock stake shows its commitment to quantum computing, especially for industrial applications. This finance will focus on creating quantum algorithms for tough issues and strengthening the neutral atom quantum computing infrastructure's key technologies.

The strategic collaboration, announced on November 6, 2025, is expected to speed quantum computing product development and manufacturing. With about €140 million in financing, Pasqal builds quantum processors from ordered neutral atoms in 2D and 3D arrays at the Institut d'Optique since 2019.

Algorithms and Industrial Applications Drive Progress Two primary collaboration areas are the partnership's first focus. The first pillar is co-developing quantum algorithms to solve LG Electronics' toughest business difficulties. These studies focus on multiphysics simulation, optimisation, and material discovery in complex industrial applications.

These algorithms aim to enhance creativity, generate new efficiencies, and improve product performance and design throughout LG's businesses, from consumer electronics to manufacturing. Quantum computing could overcome intractable problems in several industries.

Neutral Atom Technology Strengthens Supply Chain The second major component of the strategic cooperation is joint research on neutral atom quantum computing technology. This includes optical and electronic modules and components utilised across the quantum computing value chain.

Pasqal's new technology traps atoms with laser light to create qubits. The neutral atom technology's ambient temperature operation is a major benefit. The cooperation will investigate enabling technologies to accelerate the industrialisation of room-temperature computing and improve the global supply chain for quantum technology. The agreement aims to accelerate quantum software and hardware industrialisation.

Future Market Leadership and Executive Vision

Both firms' management believe this collaboration will advance the field. Pasqal CEO Loïc Henriet called the alliance a "powerful convergence of quantum science and industrial expertise." He said the companies want to “bring quantum computing closer to solving real-world problems at scale and accelerate the deployment of industry-ready applications.”

Seong-Hyok Sean Kim, Senior Research Fellow (VP) at LG Electronics, said the company is “always pushing the boundaries of innovation to deliver transformative technologies.” LG is investing in Pasqal to “position ourselves at the forefront of quantum computing,” he said.

LG Electronics innovates in 6G communications, AI, quantum technology, and space. The “Future 2030 Summit” examined this futuristic idea.

Expanding Vision: Future 2030 Summit

LG, KAIST, and KRISS hosted Future 2030 Summit. The event was announced on October 26 and hosted at LG Electronics' Seocho R&D Campus on October 24.

Technology exchange dominated the meeting. Discussions included future technology R&D, technological objectives, possible technologies, and application and service outlooks. LG Electronics has supported the 6G Grand Summit with KAIST and others from 2022 (technology exchange meetings). The scope expanded this year. Physical AI, Quantum-X, and space industrial technologies are new topics. LG uses this expansion to strengthen industry-academia-research partnership to lead quickly evolving future technologies.

Prof. Jang Young-jae of KAIST lectured on developing a manufacturing ecosystem with physical AI, while Masahiro Horibe of AIST presented on Japan's quantum strategy and ecosystem building.

Improve 6G and Beyond Connectivity

LG Electronics leads 6G R&D. The first LG Electronics-KAIST 6G Research Centre launched in 2019. LG has partnered with universities and research institutes worldwide to secure original 6G source technologies since its founding.

LGE displayed R&D advances during the summit. Displayed was a 6G mobile FDR system. This FDR technology allows simultaneous data transmission and reception on the same frequency to improve frequency efficiency for ultra-high-speed networks.

LG launched a P5G smart factory. It offers precise, uninterrupted control of several robots in smart production. 6G technologies' immersive, lifelike content transmission and AI-sensing capabilities will power LG's AI home, mobility, and smart factories growth engines.

Finding Quantum and AI Potential

LG's focus on quantum technology (“Quantum-X”) reveals a desire to boost computer power. The company anticipates quantum technologies to transform computers, encryption, and materials research. LG studies quantum algorithms, hybrid computing architectures, and PQC for quantum innovation sovereignty.

Key to this project is KRISS collaboration. KAIST and KRISS showed quantum computing software and materials research at the summit. LG joins the IBM Quantum Network to research big data, AI, and connected vehicle quantum computing applications.

Physical AI is emerging quicker at LG. Robots and autonomous cars are physical AI. The company uses advanced humanoid R&D. This study involves LG AI Research and KIST. Conference attendees saw AI semiconductor-based robots.

Setting Up Space Tech

LG entered space to expand beyond consumer electronics. “Beyond Earth Initiative” aims to build a technical foundation for global communications and data applications.

LG will secure its technological capabilities with a communication module antenna on the fifth Nuri rocket launch. The launch is next year. This research is crucial for space communications commercialisation and technology security.

LG also offered IoT-NTN voice communication. This satellite-based system permits voice conversations across deserts and mountains with poor network coverage. The goal is to use LEO satellites to extend 6G connection and collect intelligent data for environmental and industrial use. Using AI-powered analytics and space data, LG envisions seamless space-to-ground information networks for smart cities, sustainable infrastructure, and autonomous logistics.

Finally, one strategy

LG Electronics prioritises 6G, quantum, and space technology to advance innovation. Executive Vice President Kim Byoung-hoon said, “We will continue to cooperate with various R&D partners and solidify our leadership in future core technologies such as 6G, AI, quantum, and space”.