Shares of Qualcomm (QCOM 0.39%) popped on Monday after the tech giant said it was entering the booming artificial intelligence (AI) chip market.
As of 3:15 p.m., Qualcomm's stock price was up more than 12%, after rising as much as 22% earlier in the day.
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Qualcomm's new AI chips
The semiconductor maker debuted its AI200 and AI250 chips, designed to accelerate AI workloads while reducing costs. Qualcomm's chips are optimized for inference, which is when a trained AI model is used to make predictions from new data. In turn, they are geared toward making generative AI applications more affordable for more businesses.
"These innovative new AI infrastructure solutions empower customers to deploy generative AI at unprecedented TCO [total cost of ownership], while maintaining the flexibility and security modern data centers demand," Qualcomm executive Durga Malladi said in a press release.
NASDAQ: QCOM
Key Data Points
Qualcomm's chips use its Hexagon neural processing unit (NPU) technology, which improves the efficiency of computing tasks and reduces power consumption.
The AI200 is due out in 2026. The AI250, which promises improvements in memory bandwidth of up to 10 times current-generation AI accelerators, is expected to launch in 2027.
Qualcomm is entering a massive market
Cloud platform providers are planning to spend over $500 billion to upgrade their AI infrastructure in 2026 alone, according to TrendForce. Much of these investments will be allocated to AI chips, such as those designed by Nvidia and Advanced Micro Devices.
Qualcomm wants in on this AI action. The chipmaker is thus making moves to expand beyond its core mobile device market and penetrate the rapidly expanding data center industry.
These moves will put Qualcomm in more direct competition with Nvidia and AMD -- two fierce rivals that are not to be taken lightly.
