Qualcomm will take on Nvidia with its own AI chips

Qualcomm on Monday released a new range of artificial intelligence chips to compete with market leader Nvidia, as the race to cash in on the AI ​​data center giant heats up.

If successful, Qualcomm, the San Diego-based tech giant, could gain a foothold in data centers that power AI as customers seek alternatives to Nvidia, which controls nearly 90% of the AI ​​chip market.

The Qualcomm AI200 is scheduled to be the first chip in this series to be commercially available in 2026, followed by the AI250 chip in 2027. The company’s stock jumped 20% after news of its entry into the data center market.

It plans to sell its purpose-built AI server racks that contain dozens of AI chips that can be installed in data centers, and will also sell only standard AI chips that enterprises can buy and plug into their existing servers.

“Our rich software stack and open ecosystem support make it easier than ever for developers and enterprises to integrate, manage and scale pre-trained AI models in our select AI inference solutions,” said Durga Malladi, senior vice president, Qualcomm.

Qualcomm is famous for the chips used to power smartphones. It is one of the latest entrants into the AI ​​chipmaking arena, joining Intel and AMD to compete with Nvidia. Qualcomm is positioning itself as an energy-efficient chip that will cost less to run over the long term.

These companies see an opportunity in making inference chips, which are used when trained AI models run real-time calculations to produce outputs such as answering questions or creating images.

Demand for such AI inference chips has increased with widespread adoption and New use casesWith companies like Amazon, Google, and Microsoft Building your own AI chips.

According to estimates, nearly $7 trillion in capital expenditures will be spent on data centers by 2030. McKinsey’s estimate.

“It makes sense that Qualcomm wants to diversify beyond smartphones and get into that game,” says Austin Lyons, analyst and founder of ChipStrateg, a semiconductor publication. “It’s a nice and different vector — not just consumer products, but the data center.”

OpenAI, in September, signed a $10 billion deal with Broadcom to design custom AI chips, and invested in AMD with a commitment to buy MI450 AI chips.

Qualcomm also signed Saudi Arabia’s Humain, an AI company backed by the country’s sovereign wealth fund, as the first customer for the new series of chips. The chips will be deployed in human data centers in 2026.

Homin plans to launch a $10 billion venture fund, and in May, picked up Groove, another California chipmaker., Supplying inference chips for these data centers.

Abu Dhabi-backed G42, an AI development company – which owns a stake in US chipmaker Cerebros Systems – will build a 5 gigawatt UAE-US AI campus announced during President Trump’s visit in May.

Gulf states have emerged as power players in AI, as the Trump White House scrapped Biden-era chip export restrictions and struck multibillion-dollar deals for the United States to provide the advanced chips needed to fuel its AI ambitions.