Qualcomm has unveiled plans to rejoin the data centre market by launching new custom CPUs optimised for AI workloads, in a move that positions it directly against rivals like Intel and AMD.
The chips will be designed to connect seamlessly with Nvidia’s GPUs — a critical component in training large language models and powering advanced AI tools.
This marks Qualcomm’s most significant foray into data centres since its earlier attempts in the past decade, signalling a broader shift away from its smartphone-centred business model.
With AI infrastructure becoming a global battleground, the company is also expanding regionally through new partnerships, aiming to play a bigger role in enterprise computing.
New CPUs to link with Nvidia GPUs
On Monday, Qualcomm announced its plans to release custom data centre CPUs that will work alongside Nvidia’s powerful GPUs.
These new processors are designed to optimise AI performance by integrating with Nvidia’s ecosystem of hardware and software — an essential feature, given Nvidia’s dominance in the AI chip space.
Graphics processing units from Nvidia are already widely used across data centres for training generative AI models such as those powering chatbots and virtual assistants.
These GPUs need to be paired with efficient central processing units to unlock their full potential.
Qualcomm’s move signals an attempt to insert itself into this lucrative market by delivering chips that are compatible with Nvidia’s established infrastructure.
Qualcomm’s earlier data centre efforts in the 2010s were shelved due to limited traction.
But since acquiring chip designer Nuvia in 2021 — a startup known for building processors based on Arm architecture — the company has renewed its focus on building competitive server-grade CPUs.
The upcoming chips aim to be both power-efficient and tailored for AI workloads at scale.
Shift away from smartphones
Qualcomm’s push into AI-ready server chips is part of a wider business diversification strategy under CEO Cristiano Amon.
For years, the company has relied on its dominance in mobile chipsets, supplying processors and modems to Android handset manufacturers.
However, with smartphone growth stagnating globally, Qualcomm has been expanding into automotive chips, personal computers, and now data centres.
Amon confirmed on Monday at Computex in Taipei that Qualcomm is gaining traction in the PC space, with over 85 Snapdragon X Series-based designs either available or in development.
These PC chips, announced in 2023, are being pitched as ideal for on-device AI — enabling faster and more secure AI applications by processing data locally rather than sending it to the cloud.
This focus on edge AI, where computations happen directly on the device, aligns with Qualcomm’s design philosophy of building energy-efficient processors.
The company claims its chips can reduce latency and improve data privacy — key features in industries increasingly concerned with AI model performance and security compliance.
Deal signed with Saudi AI firm
Last week, Qualcomm signed a memorandum of understanding with Saudi Arabian AI firm Humain to co-develop regional data centres.
Humain, which operates under the kingdom’s sovereign wealth vehicle, the Public Investment Fund (PIF), represents another entry point for Qualcomm into international markets pursuing AI leadership.
This deal aligns Qualcomm with a broader movement of US tech firms deepening ties with Middle Eastern governments, particularly in artificial intelligence and semiconductor infrastructure.
Saudi Arabia, which has been investing heavily in next-generation technologies, offers a growing market for firms able to supply chips and computing power for local data centres and cloud services.
Incorporating this regional play into its AI strategy could help Qualcomm better compete against industry giants like Amazon and Microsoft, both of whom already design custom chips for their own cloud services.
It also brings Qualcomm into closer competition with Intel and AMD, which remain entrenched players in the server CPU segment.
New PC chip coming in September
As part of its ongoing expansion into AI hardware, Qualcomm will announce a new PC chip at its annual summit in September.
While details remain limited, this chip is expected to build on the Snapdragon X Series and support even greater AI capabilities on-device.
With the AI market evolving rapidly and competition intensifying in both the data centre and consumer segments, Qualcomm is positioning itself as a power-efficient alternative with versatile applications across enterprise, automotive, and personal computing.
Whether this new direction can generate long-term gains remains to be seen, but the company’s re-entry into the data centre space — especially with Nvidia compatibility — puts it squarely on the radar of global AI infrastructure planners.
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