Qualcomm to take on Nvidia with its own AI chips
Qualcomm on Monday announced the launch of a new series of artificial intelligence chips to compete with market leader Nvidia, as the race to profit from the massive construction of AI data centers intensifies.
If successful, Qualcomm, a San Diego-based tech giant, could gain a place in data centers powering AI as customers seek alternatives to Nvidia, which controls nearly 90% of the AI chip market.
The Qualcomm AI200 is expected to be the first chip in the series that will be commercially available in 2026, followed by the AI250 chip in 2027. The company’s shares jumped 20% after announcing its entry into the data center market.
It plans to sell its specially designed AI server racks containing dozens of AI chips that can be installed in data centers, and will also sell only the standalone AI chips that companies can buy and plug into their existing servers.
“Our rich software stack and open ecosystem support make it easier than ever for developers and businesses to integrate, manage and scale AI models already trained on our optimized AI inference solutions,” said Durga Malladi, senior vice president at Qualcomm.
Qualcomm is best known for its chips used to power smartphones. It is one of the latest entrants in the field of AI chip manufacturing, joining Intel and AMD, to compete with Nvidia. Qualcomm is positioning itself as an energy-efficient chip that will cost much less to operate in the long term.
These companies see an opportunity in creating inference chips, which are used when a trained AI model runs calculations in real time to generate results such as answering questions or generating images.
Demand for such AI inference chips has increased with wider adoption and newer use caseswith companies such as Amazon, Google and Microsoft create their own AI chips.
Nearly $7 trillion in capital spending will be devoted to data centers by 2030, a study suggests. Mckinsey Estimate.
“It makes sense that Qualcomm would want to branch out beyond smartphones and get into that game,” says Austin Lyons, an analyst and founder of Chipstrat, a semiconductor publication. “It’s an interesting and different vector: not just consumer products, but also a data center.”
OpenAI signed a $10 billion deal with Broadcom in September to design custom AI chips and invested in AMD with a commitment to buy its MI450 AI chips.
Qualcomm also signed Humain, a Saudi AI company 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.
Human plans to launch a $10 billion venture capital fund and in May chose another California chipmaker, Groq., to provide inference chips for its data centers.
G42, an Abu Dhabi-backed AI development holding company – which owns a stake in US chipmaker Cerebras Systems – will build the 5-gigawatt UAE-US AI campus announced during President Trump’s May visit.
Gulf countries have emerged as powerful players in the AI field, as the Trump White House revised Biden-era chip export restrictions and negotiated multibillion-dollar deals for the United States to supply the advanced chips needed to power its AI ambitions.
