Qualcomm’s big AI gamble: Breaking Nvidia’s chips stronghold

Qualcomm has long been known primarily as the maker of smartphone chips, but since taking the reins five years ago, CEO Cristiano Amon has worked to change that and equip the company for the tough but lucrative AI chip wars. Since 2021, Qualcomm has reinvented itself to become a major player in newer areas such as tech for cars—including driver-assistance and connected-vehicle systems±—and chips to power smart home devices and wearables. Now, Amon has a more ambitious target in his sights: His five-year plan, presented to investors this week, is nothing less than a challenge to Nvidia’s long dominance in the market for A.I. chips for data centers. At Qualcomm’s investor day in Manhattan on Wednesday, he and his team unveiled its latest lines of AI accelerators and central processing units (CPUs). Taking Nvidia on won’t be easy for Qualcomm. After all, Nvidia—the most valuable company in the world with a market capitalization of $4.7 trillion—is the market leader by far in AI chips. “A lot of people ask, ‘Oh, in this crowded market, is it too late? It’s never too late for Qualcomm,” Amon told a packed room of Wall Street analysts on Wednesday. Investors seemed to agree with Amon’s assessment: Qualcomm shares shot up as much as 15% on Wednesday when the chipmaker forecast annual sales of more than $15 billion from A.I. components in data centers by fiscal 2029. (By Friday, those share gains had mostly evaporated, as Qualcomm was dragged down by the sell-off hitting many large tech stocks on the Nasdaq.) Qualcomm also projected annual revenue of $40 billion for its businesses excluding handsets, long its big revenue driver, by 2029. That’s double a long-range forecast from two years ago and a signal that Qualcomm is making progress in its efforts to rely less on mobile phone chips. Qualcomm’s investor day featured video endorsements from the CEOs of Meta and Microsoft, Mark Zuckerberg and Satya Nadella respectively, and senior executives from Amazon and Goo