Qualcomm, a longtime kingpin in chips for smartphones, has largely missed out as demand has surged for chips used in data centers for artificial intelligence. Now it may finally be joining the party.
The San Diego company announced a new line of A.I. chips on Monday, sold in complete systems or as add-in cards for other computers, along with a major order for the technology from a high-profile company in Saudi Arabia.
Qualcomm’s shares initially jumped by more than 20 percent on the news, though the stock was up later by about 12 percent.
The reaction underscored the outsized investor interest in A.I. chips, driven by a multiyear sales boom that has pushed the market value of the dominant supplier, Nvidia, to more than $4.5 trillion. Shares of Advanced Micro Devices, one of Nvidia’s most credible competitors, have more than doubled this year.
Qualcomm has not fared as well, partly because the smartphone market has not been growing much lately. But Cristiano Amon, the company’s chief executive, has laid out several initiatives to diversify the business.
Qualcomm helped invent core technology used in cellular networks, selling modem chips that phones use to communicate. The company later combined that ability with basic computing functions, using technology licensed from the British company Arm Holdings.
More recently, Qualcomm has targeted phones and personal computers with chips tailored to handle machine learning, performing the mathematical calculations used for many A.I. functions. It calls such chips neural processing units, or N.P.U.s, and has signaled plans to use that technology to move into A.I. data centers.
That’s not easy, in part because data center operators are demanding that A.I. chip makers supply complete systems that efficiently integrate their technology with other components. Nvidia frequently sells hardware in bundles called racks that stand taller than a refrigerator.
Qualcomm’s first comparable products announced on Monday are called the AI200 and AI250. They bundle Qualcomm chips with memory chips and other components in rack-sized systems or circuit boards that plug into standard computers called servers. The company said the systems offer an energy-efficient approach for A.I. jobs known as inferencing, in which services like chatbots serve up answers to users.
The AI200 will become available in 2026, Qualcomm said, while the AI250 is not expected until 2027. Qualcomm packaged the announcement with news that Humain, a Saudi state-backed company that has emerged as an A.I. champion for the country, will use its technology as the core of a major A.I. inferencing service.
The companies had announced plans to collaborate in May, one of many such partnerships announced with U.S. chip makers and other technology suppliers. AMD had reached a deal with Humain that same month to deploy 500 megawatts of computing power worth $10 billion.
Qualcomm put the capacity of its deal with Humain at 200 megawatts, with no dollar value or pricing for its hardware disclosed.
“Together with Humain, we are laying the groundwork for transformative AI-driven innovation that will empower enterprises, government organizations and communities in the region and globally,” Mr. Amon said in a statement.
Stacy Rasgon, an analyst at Sanford C. Bernstein, said Qualcomm did not supply enough information to be able to value the Humain transaction precisely. But he calculated $2 billion in revenue to Qualcomm as a rough estimate. That is smaller than many recent A.I. chip transactions, but a boost for the company’s income statement.
While he and other analysts do not see such rivals taking much business from Nvidia, the stock market is betting that the A.I. market will provide some new business to many different chip players.
“The tide is rising so fast, and it will continue to rise so fast, it will lift all boats,” said Timothy Arcuri, a managing director and senior analyst with UBS, during a conference call Monday.
The post Qualcomm Unveils New Line of Chips to Join the A.I. Boom appeared first on New York Times.
