Qualcomm sets 2029 AI data center target in Nvidia challenge

Qualcomm laid out a five-year plan to push into AI chips for data centers, a market Fortune reported is dominated by Nvidia. The move matters because Qualcomm, long associated with smartphone processors, is trying to build a larger business beyond handsets as demand for AI computing hardware grows.

At an investor day in Manhattan on Wednesday, CEO Cristiano Amon and other Qualcomm executives introduced new AI accelerators and central processing units, according to Fortune. Qualcomm forecast more than $15 billion in annual revenue from AI components for data centers by fiscal 2029.

The company also projected $40 billion in annual revenue by 2029 from businesses outside handsets, Fortune reported. That figure is twice the long-term forecast Qualcomm gave two years earlier and reflects Amon’s effort to reduce the company’s dependence on mobile phone chips.

A broader push beyond phones

Amon has led Qualcomm since 2021, and Fortune reported that he has pushed the company into automotive technology, connected-vehicle systems, driver-assistance products, smart home devices and wearables. The new data center plan adds another front to that expansion.

The company is also trying to grow in PC chips, where Fortune said it is competing with Intel, AMD and others. In automotive, Qualcomm is continuing to expand a business it began emphasizing earlier in Amon’s tenure.

Qualcomm’s new target puts it up against Nvidia, which Fortune described as the clear leader in AI chips and the world’s most valuable company, with a market capitalization of $4.7 trillion. Amon told Wall Street analysts at the event, “A lot of people ask, ‘Oh, in this crowded market, is it too late? It’s never too late for Qualcomm.’”

Investors initially responded favorably. Qualcomm shares rose as much as 15% on Wednesday after the forecast, Fortune reported, though most of those gains had faded by Friday as a broader sell-off hit large technology stocks on the Nasdaq.

Software deal targets Nvidia’s moat

Qualcomm also announced a $3.9 billion acquisition of AI software company Modular this week, according to Fortune. The deal gives Qualcomm a software platform intended to compete with Nvidia’s CUDA.

Fortune reported that CUDA lets developers build AI programs and services while making full use of Nvidia graphics processing units. That software ecosystem has helped keep many developers tied to Nvidia’s hardware, and Qualcomm is using Modular to challenge that advantage.

Qualcomm’s investor day included video endorsements from Meta CEO Mark Zuckerberg and Microsoft CEO Satya Nadella, as well as senior executives from Amazon and Google, Fortune reported.

Amon also addressed public concern about the power demands of AI data centers. He told Fortune that resistance to those energy needs could help Qualcomm sell power-efficient CPUs, saying, “There is pushback, but that’s good because it is going to drive the industry to look for alternatives.”

Amon rejected concerns that Qualcomm is pursuing too many markets at once, according to Fortune. He described Qualcomm as having a strong engineering culture and said the company has faced pressure throughout its reinvention effort.

He also said a shift of this size requires constant internal communication. Amon told Fortune that employees need a clear vision repeated often enough for them to understand and commit to the plan.

This story draws on original reporting from Fortune.