News
Qualcomm Enters AI Chip Race, Challenging Nvidia and AMD Dominance
Source: cnbc.com
Published on October 28, 2025
Core topic: Qualcomm AI Chips
Keywords: Qualcomm AI chips, Nvidia competition, AMD AI chips, data center AI, AI accelerators, inference chips, Hexagon NPUs, AI hardware market, AI development costs, semiconductors
Main keywords: Qualcomm, AI chips, Nvidia, AMD, data centers, AI accelerators, inference chips, semiconductors, AI hardware, AI development, Hexagon NPUs, AI market competition
Supporting n-grams: AI chip market, Nvidia dominance, AI accelerator chips, data center technology, AI inference chips, power consumption, AI hardware innovation, competitive pricing, AI development costs, Hexagon neural processing units
Qualcomm Challenges Nvidia and AMD in the AI Chip Market
Qualcomm has made a bold move into the AI chip market, unveiling new AI accelerator chips designed to compete directly with industry giants Nvidia and AMD. This strategic shift, which sent Qualcomm’s stock up by 11%, marks a significant expansion for the company, traditionally known for its mobile and wireless semiconductors. The new chips target data centers, the backbone of AI development, and aim to disrupt Nvidia’s long-standing dominance in the AI semiconductor space.
The AI chip market has been largely dominated by Nvidia, whose GPUs have powered AI models like ChatGPT. However, the high costs associated with AI development have led companies like OpenAI to explore alternatives. Qualcomm’s entry introduces a new player, promising to bring more competition, potentially lower prices, and faster innovation in AI hardware. The company’s AI200 and AI250 chips, slated for release in 2026 and 2027, are designed to fit into full, liquid-cooled server racks, matching the offerings from Nvidia and AMD.
The Technology Behind Qualcomm’s AI Chips
Qualcomm’s data center chips are built on the AI components found in its smartphone chips, specifically the Hexagon neural processing units (NPUs). According to Durga Malladi, Qualcomm’s general manager for data center and edge, the company’s experience in mobile technology has enabled a smoother transition to data center solutions. Unlike competitors focusing on AI training, Qualcomm’s chips are optimized for AI inference, the process of running AI models efficiently.
One of Qualcomm’s key advantages is its focus on lower power consumption and cost of ownership. The AI cards support up to 768 gigabytes of memory, surpassing both Nvidia and AMD’s offerings. Additionally, Qualcomm plans to offer its AI chips and other components separately, allowing clients to design custom racks. This flexibility could appeal to hyperscalers and even rival AI chip companies like Nvidia and AMD, who might integrate Qualcomm’s central processing units (CPUs) into their systems.
Potential Impact on the AI Market
Qualcomm’s entry into the AI chip market is expected to bring increased competition and innovation. While Nvidia currently holds a strong lead, the demand for AI hardware is growing rapidly, leaving room for multiple players. Qualcomm’s focus on inference chips and claims of superior power efficiency could give it a competitive edge, especially as companies look to optimize their AI infrastructure costs. However, the company has not yet disclosed pricing for its chips, cards, or racks, leaving a crucial piece of information unanswered.
The Future of AI Hardware
The data center market is projected to see massive growth, with an estimated $6.7 trillion in capital expenditures expected through 2030, driven primarily by AI chip-based systems. Qualcomm has already secured a partnership with Saudi Arabia’s Humain to supply AI inferencing chips for data centers in the region. As AI continues to expand across industries, the demand for specialized hardware will only increase, making Qualcomm’s entry a strategic move to capitalize on this growing opportunity.
In summary, Qualcomm’s foray into the AI chip market represents a significant shift in the industry. By challenging Nvidia and AMD, the company aims to carve out a niche in the rapidly expanding AI hardware sector, offering innovative solutions that could reshape the future of AI development.