CEO confirms chip designer is in ‘advanced discussions’ with a hyperscaler ahead of 2028 data center comeback.
Qualcomm might be returning to the data center industry, with reports suggesting the chip designer is working on a line of CPUs.
The firm withdrew from the data center market back in 2018 to focus on its smartphone efforts, having failed in its attempts to develop Arm-based server chips.
But that retreat looks set to end, with CEO Cristiano Amon confirming the move in its Q3 earnings call, telling investors the market “represents a new growth opportunity for Qualcomm and is a logical extension of our diversification strategy.”
“As inference gains scale, cloud service providers are building dedicated inference clusters focused not only on performance but also efficiency, specifically tokens per dollar and tokens per watt,” Amon said.
“These factors, combined with the shift from merchant x86 CPUs to custom Arm-compatible CPUs for both cloud computing and AI head node[s], create an entry point for Qualcomm.”
The market shift, first reported by The Register, will see Qualcomm build a general-purpose CPU that will be “very focused on hyperscalers.” The proposed offering will utilize existing innovations found in its 64-bit Arm-based Oryon CPUs.
Qualcomm is also working on Neural Processing Unit (NPU)-based AI inference accelerator cards, along with plans to build rack-based data center offerings.
“We'll really look [at] how we're starting to see inference taking over training,” Amon told investors. “There is a new dynamic in the marketplace, which is about [the] ability to be efficient with tokens per dollar as well as energy. That creates an opportunity for us for that.
“We have been building accelerator cards, and we will be building a rack as well. And those are the two areas that we're building product road map[s].”
Amon also referenced Qualcomm’s proposed takeover of Alphawave IP Group, announced back in June, with its data center design capabilities set to support its return to the market. The CEO said the deal is expected to close during the first calendar quarter of 2026.
“We believe [Alphawave’s] leading connectivity in the industry. And that should inform you of the type of customers that we've been focusing on,” the CEO said.
Amon said Qualcomm is still in the “early stages” of its data center return, and has already engaged with multiple potential customers, with the CEO confirming it’s in “advanced discussions with a leading hyperscaler.”
“If successful, we expect revenues to begin in the fiscal '28 time frame,” he added. “Hopefully, that creates a halo effect that could validate our platform and create other opportunities down the road.”
An early win saw Qualcomm sign on to develop AI data centers with Humain, the Saudi Arabian government's AI company.
Having already penned deals with Nvidia, AMD, and Groq, Humain’s agreement with Qualcomm will see the pair work together on edge and cloud facilities in Saudi Arabia and around the world using Snapdragon and Dragonwing Edge processors.
