Qualcomm says Microsoft, Meta will use its new AI chips
FILE PHOTO: Qualcomm logo is displayed at the company’s booth at the 8th China International Import Expo (CIIE) in Shanghai, China, November 5, 2025. REUTERS/Maxim Shemetov/File Photo
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June 24 : Qualcomm said on Wednesday that Microsoft and Meta Platforms will use its new AI chips and that it will make custom chips for two other unnamed “hyperscalers.”
The San Diego-based company, which is the industry leader in smartphone chips, held an investor presentation to showcase its move into supplying AI chips for data centers as it tries to gain a foothold in a market dominated by Nvidia.
The shift reflects mounting pressure in the smartphone market, which has been squeezed by a memory chip shortage driven by surging demand for AI infrastructure, and major customers such as Apple and Samsung developing chips in-house.
Qualcomm on Wednesday said Microsoft will use its new category of chips that relies on cheap memory chips used in smartphones and laptops, instead of the pricey high-bandwidth chips used by Nvidia and SRAM memory used by Cerebras Systems.
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The company calls the new category “High Bandwidth Compute” or HBC.
“That is a tremendous value that we deliver to the industry in terms of performance per cost advantage,” said Tony Pialis, Qualcomm’s data center chief.
Qualcomm said Meta will use its new CPU called Dragonfly C1000 that it has designed specifically for AI data centers, entering a market where both Arm Holdings and Nvidia are courting customers.
Pialis also said Qualcomm has won two major customers — called “hyperscalers” in the computing industry — for whom it will make custom chips, with revenue starting before the end of this calendar year.
“I have not had to push my way into hyperscale customers; they’ve been pulling us in,” Pialis said, without naming the customers.
CROWDED DATA CENTER CHIP MARKET
Qualcomm, which has attempted to boost its data-center business multiple times, is re-entering a fast-growing, but hyper-competitive AI market full of large incumbents such as Nvidia, the newly minted Cerebras and other custom chip options including Amazon’s Graviton and Google’s Axion, Bank of America analysts warned in a client note on Tuesday.
Qualcomm said in April that it plans to begin shipping processors and other AI chips for data centers by year-end.
It also said it was working with customers on three kinds of chips: central processing units, inference accelerators, and custom application-specific integrated circuits (ASICs), a segment that has been booming for rivals such as Broadcom and Marvell.
AI inference — running trained AI models — has emerged as a key battleground.
BofA analysts said they expect modest revenue of roughly $2 billion to $5 billion annually from Qualcomm’s data center push by fiscal 2027-2028.
Investors will be watching for updated long-term financial targets at the event, including Qualcomm’s growth ambitions for its non-handset businesses.
Attention is also likely to focus on its $4 billion all-stock deal for AI software startup Modular, announced earlier on Wednesday, which positions Qualcomm against Nvidia’s proprietary CUDA software that has locked in millions of developers.
Source: Reuters
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