Technology company Qualcomm is actively developing data center CPUs and is in advanced negotiations with leading cloud service providers, commonly known as hyperscalers.
In a strategic move, Qualcomm, the American multinational semiconductor and telecommunications equipment company, is expanding its horizons beyond mobile devices and into the datacenter market. The company's primary focus is on developing ARM-compatible general-purpose CPUs tailored for hyperscale cloud providers, alongside AI inference accelerators and infrastructure such as accelerator cards and rack-scale solutions.
Qualcomm's strategy hinges on leveraging efficiency in performance (tokens per dollar and tokens per watt) and the shift from traditional x86 CPUs to custom ARM designs to gain an entry point. The company is also bolstering its capabilities through acquisitions like Alphawave Semi, which enhances its IP in high-speed connectivity and AI accelerator design for data center applications.
Significant progress has been made in this endeavour. Qualcomm is in "advanced discussions" with at least one leading hyperscale customer interested in integrating Qualcomm silicon into its data centers. These engagements span multiple potential customers, pointing towards initial revenue generation around fiscal 2028.
The company is also forming strategic partnerships, such as a memorandum of understanding with Humain to develop AI data centers in Saudi Arabia. Qualcomm is ensuring compatibility between its Oryon processors and Nvidia technology to broaden its market reach.
In terms of financial performance, Qualcomm's net income climbed 25% to $2.666 billion, and its revenue for the reported quarter grew by 10% year-over-year to $10.35 billion. The company's Internet of Things products produced a 24% growth to $1.68 billion. The automotive sector also saw a 21% growth, with revenue reaching $984 million.
Qualcomm's share price dived from around $159 to $149 in after-hours trading, before rebounding to $151. Samsung shares, however, fell from ₩73,000 to ₩71,500. Samsung's foundry business will ramp up mass production of a new mobile SoC with the 2nm GAA process in the second half of 2025.
In the mobile sector, Qualcomm is working on a product that serves as the head unit for inferencing clusters, while Samsung has announced it will focus on improving the competitiveness of its Exynos systems-on-chip (SoC) for 2026 flagship mobile lineups.
CEO Cristiano Amon sees the change in CPUs for the age of AI as an entry point into the datacenter market. Qualcomm expects revenues from its datacenter expansion to begin in the fiscal 2028 timeframe. Rival chip designer Broadcom, meanwhile, has several hyperscale clients who want a million or more custom accelerators starting in 2026.
Qualcomm's CEO expressed optimism about the growing market for smart glasses, which Qualcomm currently dominates. The company is building accelerator cards and plans to build a rack as well. Qualcomm is developing a general purpose CPU and is very focused on hyperscale customers due to their first party workloads for ARM compatible CPUs.
In conclusion, Qualcomm is focusing on a multi-faceted product portfolio for datacenters—ranging from CPUs to inference accelerators and rack solutions—and targeting key hyperscale clients to establish a foothold in AI-driven cloud infrastructure market segments.
- Qualcomm aims to further expand its influence in the tech industry by pioneering a datacenter market entry, focusing on ARM-compatible general-purpose CPUs, AI inference accelerators, and related infrastructure, such as accelerator cards and rack-scale solutions.
- In the pursuit of increased market reach, Qualcomm has entered into strategic partnerships, including a memorandum of understanding with Humain to develop AI datacenters in Saudi Arabia, and has ensured compatibility between its Oryon processors and Nvidia technology.
- While simultaneously making progress in the mobile sector with innovative products, Qualcomm's CEO, Cristiano Amon, sees the transition to AI-driven cloud infrastructure as an opportunity for Qualcomm to establish a strong presence in datacenter market segments, with anticipated revenue generation around fiscal 2028.
