Qualcomm Unveils AI200 and AI250 Chips: Expanding into AI Data Centers to Compete with Nvidia and AMD

Qualcomm (QCOM) has made a groundbreaking move into the competitive AI data center chip market with the unveiling of its first-ever AI-focused chips, AI200 and AI250. This marks a strategic shift for Qualcomm as it diversifies beyond its traditional smartphone chip business. The announcement, made on October 27, 2023, led to a significant boost in Qualcomm’s market value, with its stock price surging more than 20% during intraday trading and closing up 11.09% at $187.68, according to Yahoo Finance.

Optimized for AI inference tasks rather than AI training, the AI200 and AI250 chips are built with energy efficiency and cost-effectiveness at their core. These designs aim to meet the increasing demands of modern data centers while establishing Qualcomm as a key player in the rapidly expanding AI chip sector.

AI Chips Designed Specifically for Inference Tasks

The AI200 chip, slated for release in 2026, is Qualcomm's inaugural data center-specific chip and integrates its Hexagon NPU (neuroprocessing unit) technology. The AI200 can be used in server rack configurations featuring Qualcomm CPUs or as standalone chips and cards tailored for specific enterprise needs. Building on its predecessor, the AI250 chip will launch in 2027, promising substantial improvements, including a tenfold increase in memory bandwidth. Qualcomm has announced a strategic roadmap, with the third generation of AI chips expected to follow in 2028.

Designed explicitly for inference tasks instead of training workloads, these chips focus on energy efficiency and low power consumption—critical requirements for modern enterprises aiming to manage operational costs effectively. This strategic choice aligns with growing industry demands for power-efficient solutions that lower the total cost of ownership (TCO) in data center environments. Industry experts have noted the growing emphasis on inference tasks, which handle processes like classification, predictions, and optimizations for deployed AI models.

Targeting Enterprise Customers with Flexible Configurations

The AI200 and AI250 chips are engineered to support high-performance computation while providing flexible implementation options. Enterprise clients can choose from complete server systems, modular components, or individual chips depending on their specific needs. This adaptability underscores Qualcomm’s ambition to penetrate the enterprise AI market and cater to businesses seeking customizable and efficient solutions.

In a surprising strategic twist, Qualcomm suggested that even industry giants like Nvidia (NVDA) and AMD (AMD)—its primary competitors in the AI chip domain—could potentially become customers for the AI200 and AI250 technologies. By offering chips as modular and flexible components, Qualcomm aims to position itself as a versatile provider in the data center ecosystem rather than solely competing head-on with rivals.

For Qualcomm, this marks a significant pivot. While the company’s historical focus was on smartphone processors and licensing, the entry into the AI server market signals a broader diversification strategy. Qualcomm had previously introduced AI100 server cards but positioned them as drop-in solutions for general-purpose servers. The AI200 and AI250, however, represent a major upgrade and an integral part of dedicated full-stack AI systems.

Learning from Previous Data Center Challenges

This isn’t Qualcomm’s first attempt at entering the data center chip market. In 2017, the company launched the Centriq 2400 platform in partnership with Microsoft (MSFT), aiming to compete against Intel (INTC) and AMD in the data center industry. However, the Centriq project was discontinued after facing competitive challenges and internal issues, including legal disputes.

Industry analysts remain cautiously optimistic regarding the commercial potential of Qualcomm’s latest AI-focused products. While the technical merits of the AI200 and AI250 chips are evident, Qualcomm faces formidable competition from established leaders like Nvidia and AMD, as well as tech giants such as Amazon (AMZN), Google (GOOG), and Microsoft, which are all investing billions in developing proprietary AI chip technologies. Maintaining competitive advantages in such a challenging landscape will require consistent innovation and strategic execution.

Financial Implications and Future Outlook

The financial stakes of Qualcomm’s venture into AI chip production are substantial. In its third-quarter 2025 earnings report, Qualcomm generated $10.4 billion in revenue, with $6.3 billion derived from its smartphone chip business. However, the company has yet to disclose detailed figures for its data center-related revenue, leaving analysts to speculate on whether its AI chip division could emerge as a significant contributor to overall profitability.

As Qualcomm attempts to carve out a niche in this tightly contested market, its ability to differentiate through energy-efficient and cost-effective AI solutions will be critical. The competitive dynamics will remain intense as established players continue to dominate, and Qualcomm aims to establish a foothold in the next wave of AI advancements.

Its ambitious yearly release schedule beginning in 2026 reflects Qualcomm’s confidence in its product roadmap and its desire to gain incremental traction in the market. Industry observers will keep a close eye on Qualcomm’s progress to determine whether this strategic entry into AI data center chips will translate into sustained success or merely serve as a stepping stone in the wider diversification of its technology portfolio.