Qualcomm Enters the AI Chip Market for Data Centers

Qualcomm, known for its mobile technology, has announced its entry into the AI chip market for data centers, a sector dominated by NVIDIA. This move comes at a time of tremendous growth in the industry, with major companies competing to offer solutions that excel in performance and cost.

Launch of AI200 and AI250 Chips

On October 28, 2025, Qualcomm launched its new AI200 and AI250 solutions, systems specifically designed to handle AI workloads. The company’s stock rose by 11% following the announcement, reflecting investor confidence in these products’ potential to change the company’s trajectory.

This bold move by Qualcomm aims to strengthen its presence in the AI chip market for data centers, as the company seeks to overcome the decline in the smartphone market.

Qualcomm’s Different Strategies

Qualcomm is adopting two different strategies with the launch of its new chips. The AI200 chip, scheduled for release in 2026, offers a practical approach by providing up to 768 gigabytes of memory per card. This massive memory capacity is essential for running large language models and multimodal AI applications.

The AI250 chip, expected to debut in 2027, carries high expectations thanks to its near-memory computing architecture, which promises to achieve effective memory bandwidth up to 10 times greater.

Economic and Competitive Challenges

Beyond performance, Qualcomm focuses on reducing the total cost of ownership, a critical point for data center operators who calculate energy, cooling, and consumption costs. Each unit consumes 160 kilowatts of power and uses direct liquid cooling.

Qualcomm also emphasizes security by integrating confidential computing features to meet the growing demand from companies for protecting sensitive models and data.

Partnership with Saudi AI Company

Qualcomm announced a partnership with the Saudi AI company “Humain,” which has committed to deploying 200 megawatts of Qualcomm chips for data centers. Analysts estimate that this deal represents about $2 billion in revenue for Qualcomm.

This partnership is a significant step for Qualcomm to affirm its position in the AI infrastructure market, as the company seeks to be a strategic technology partner for emerging AI economies.

Conclusion

By entering the AI chip market for data centers, Qualcomm aims to redefine its identity and expand its horizons amid the decline of the mobile phone market. With the launch of the AI200 and AI250 chips, the company positions itself as a serious contender in a rapidly growing market. Despite challenges from major competitors like NVIDIA and AMD, Qualcomm’s strategies in reducing total costs and focusing on security may make it an attractive choice for many companies.