Qualcomm on Monday announced a new series of artificial intelligence chips to compete with market leader Nvidia as the race to profit from massive artificial intelligence data center construction heats up.
If successful, Qualcomm, the San Diego-based tech giant, could take over the data centers powering AI as customers seek alternatives to Nvidia, which controls about 90% of the AI chip market.
The Qualcomm AI200 is planned to be the first chip in the series to be commercially available in 2026, followed by the AI250 chip in 2027. The company's shares rose 20% following news of its entry into the data center market.
The company plans to sell its custom-built AI server racks, containing dozens of AI chips that can be installed in data centers, and will also sell only individual AI chips that businesses can buy and connect to their existing servers.
“Our rich software stack and support for an open ecosystem make it easy for developers and enterprises to integrate, manage and scale pre-trained AI models with our optimized AI inference solutions,” said Durga Malladi, senior vice president at Qualcomm.
Qualcomm is best known for its chips used in smartphones. It is one of the latest entrants into the AI chip market, joining Intel and AMD in competing with Nvidia. Qualcomm is positioning itself as an energy-efficient chip that will cost much less to operate in the long run.
These companies see opportunity in creating inference chips, which are used when a trained AI model performs calculations in real time to produce results, such as answering questions or creating images.
Demand for such AI inference chips has increased as they become more widely adopted and new use caseswith companies such as Amazon, Google and Microsoft creating your own artificial intelligence chips.
It is forecast that approximately $7 trillion in capital expenditures will be spent on data centers through 2030. McKinsey score.
“It makes sense that Qualcomm wants to move beyond smartphones and get into this game,” said Austin Lyons, an analyst and founder of Chipstrat, a semiconductor publication. “It’s a good and different vector—not just consumer products, but also data centers.”
In September, OpenAI signed a $10 billion deal with Broadcom to develop custom AI chips and invested in AMD, committing to buy its MI450 AI chips.
Qualcomm has also signed Saudi artificial intelligence company Humain, backed by the country's sovereign wealth fund, as its first customer for the new series of chips. The chips will be deployed in Humain data centers in 2026.
Humain plans to launch a $10 billion venture fund and in May selected another California-based chipmaker, Groq., supply output chips for its data centers.
Abu Dhabi-backed artificial intelligence holding company G42, which has a stake in US chipmaker Cerebras Systems, will build a 5-gigawatt AI campus in the UAE and the US, which previously announced during President Trump's visit in May.
Gulf countries have emerged as powerful players in artificial intelligence as the Trump White House lifted Biden-era chip export restrictions and brokered multibillion-dollar deals for the United States to supply cutting-edge chips needed to fuel its artificial intelligence ambitions.
