Qualcomm Eyes Nvidia’s Crown in AI Data Centre Chip Battle

After dominating smartphone chips for years, Qualcomm is now eyeing a bigger prize in the booming AI data centre market, which is currently led by US chipmaker Nvidia. The company is preparing to challenge Nvidia’s leadership in data centre chips designed for AI workloads. 

A top executive told The Economic Times that Qualcomm has already created several technologies for data centres. He even claimed that the US-based fabless chipmaker has to find the right time to enter the market with something unique. 

The executive believes that there is still a room for multiple players in the data centre market due to its bigger size.

Currently, the data centre industry is dominated by Jensen Huang-led Nvidia. However, intensifying competition is transforming the market from a near monopoly to a fragmented landscape. 

Companies such as Amazon, Anthropic and Google are increasingly developing their own custom AI chips to train and power large language models.

Qualcomm's AI Chips Play

Last year, Qualcomm Technologies launched its next-generation AI inference-optimised solutions, including the Qualcomm AI200 and AI250 accelerator cards and racks, for data centres. 

The new systems were designed to deliver faster AI inference with higher memory capacity and better energy efficiency. Qualcomm said the products will help enable scalable and cost-efficient generative AI deployments across industries.

The company claimed that the Qualcomm AI200 and AI250 are expected to be commercially available in 2026 and 2027. 

Qualcomm said its latest AI chips are compatible with widely used AI software frameworks and development tools, while also offering lower operating costs for businesses. Alongside the chips, the company introduced rack-scale systems, reflecting a broader industry shift where firms such as Nvidia and AMD are moving beyond standalone chips to deliver complete data centre solutions.

Despite rising competition in the AI chip market, breaking Nvidia’s dominance remains challenging. Customers often face high switching costs, while Nvidia continues to maintain an edge through the strong performance of its processors and software ecosystem.

Qualcomm's Diversification

Qualcomm remains the global leader in modem chips used for wireless connectivity in smartphones. However, the company has been steadily expanding beyond the mobile market as it looks to reduce its reliance on handset sales.

The shift became more important after losing Huawei as a major customer and amid Apple’s push to design more chips in-house.

In recent years, Qualcomm has also entered the PC processor market, taking on rivals such as Intel and AMD with chips built for Windows laptops.