Qualcomm (QCOM, Financials) said Monday it is re-entering the data center CPU market and will develop custom processors that integrate with Nvidia's (NVDA, Financials) AI chips.
The announcement marks a return to a sector Qualcomm exited in the 2010s after early Arm-based development with Meta Platforms stalled. The effort is now backed by a chip design team hired from Apple in 2021.
The new CPUs will use Arm Holdings technology and are designed to link with Nvidia's rack-scale architecture to enable faster communication with its GPUs, which dominate the AI market.
Cristiano Amon, Qualcomm's CEO, said the move supports a shared strategy with Nvidia to deliver high-performance and energy-efficient computing in data centers.
Meta is once again in discussions with Qualcomm, while Saudi Arabian AI company Humain has signed a letter of understanding for a custom chip project.
The initiative positions Qualcomm against Intel and Advanced Micro Devices, which currently lead in data center CPUs, while also mirroring Nvidia's entry into CPUs with its Arm-based Grace chip.
The announcement comes amid growing demand for AI-optimized infrastructure and reflects Qualcomm's effort to diversify beyond mobile chips into enterprise computing.
Investors will be watching whether Qualcomm can secure additional hyperscale partners and how the chips perform once deployed in commercial environments.
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