In the news, it is reported that due to the title of the world’s largest chip company being taken away by Nvidia and the uncertainty of cooperation with Apple, Qualcomm is now also starting to develop generative artificial intelligence technology.
Qualcomm’s technology has penetrated into almost all smartphones. In the 1980s, it pioneered the ability to connect wirelessly to today’s 5G modems. Qualcomm charges a patent fee for every device that communicates using its patented core technology. Now, Qualcomm is working on a new way to use generative artificial intelligence (AI).
Until last month, Qualcomm was the world’s largest “fabless” chip company. But thanks to the artificial intelligence boom, Nvidia doubled its revenue in the latest quarter and surpassed Qualcomm to take the top spot.
Nvidia’s success has been fueled by the popularity of generative AI models such as ChatGPT, which are trained on Nvidia’s graphics processing units (GPUs). That’s why it’s no surprise that Qualcomm is positioning itself as a key player in artificial intelligence. Today, Qualcomm announced new in-vehicle generative artificial intelligence capabilities and a new partnership with Amazon’s cloud service AWS.
Until now, large language models have relied on massive amounts of data on the cloud to generate text and images. But Qualcomm CEO Cristiano Amon believes that generative artificial intelligence will also be in great demand outside the cloud.
Amon said in an interview in June this year: “For every word generated by artificial intelligence, a lot of calculations need to be run through the data center. I think we have a very unique ability to run these models locally. Not only can performance be improved, but costs can also be significantly reduced.”
Another reason pushing Qualcomm to seek diversification may be Apple. Apple is one of Qualcomm’s largest customers, but the future of that relationship is uncertain, and Amon has been vocal about it.
Amon said in February this year that Apple would produce its own 5G modem chips in 2024. This means that the iPhone 15, which Apple will release next week, may become the last iPhone model equipped with Qualcomm’s 5G Modem chip.
Qualcomm said its semiconductor business is growing and its licensing business accounts for a smaller share of revenue. But the question is whether its chip business can continue to grow without Apple. Moreover, in addition to Apple, there are other manufacturers developing their own chips.
Meanwhile, smartphones are facing an industry-wide downturn, with shipments expected to fall to a 10-year low. Because of this, Qualcomm has turned much of its focus to chips. The first one to bear the brunt is automobiles. Amon said that this is the most eye-catching part of Qualcomm’s differentiation strategy.
In recent years, Qualcomm has begun selling a set of hardware chips, sensors and software packages called “Snapdragon Digital Chassis” to automakers such as General Motors, Hyundai and Volvo. Now Qualcomm hopes to capitalize on the generative AI craze by convincing automakers to buy more of its chips and build new scenarios around them. For example, smart assistants can help drivers navigate cities, make reservations, and complete other daily computing tasks.
Daniel Newman, CEO of research firm Futurum Group, said: “Although this will take time, it is a sign of the future. Qualcomm has definitely created more predictability in terms of revenue. Today, more and more of the world’s largest automakers Businesses chose Qualcomm’s technology.”
Given Nvidia’s incredible run since the launch of ChatGPT last November, it’s no surprise that Qualcomm is now investing heavily in artificial intelligence. In fact, artificial intelligence is nothing new to Qualcomm. Amon said Qualcomm has been researching artificial intelligence for about ten years.
In May, Microsoft announced plans to run offline AI models on Qualcomm Snapdragon processors. In July, Meta announced that its large language model, Llama 2, would run on phones and PCs based on Qualcomm chips in 2024.
Newman said: “Qualcomm’s biggest opportunity is to figure out what these artificial intelligence applications are, whether it is related to AR, whether it is related to smart cars, whether it is related to next-generation games, whether it is related to productivity tools and applications, and whether it can be integrated into its chips. groups install into these devices in order to profit from them.”.
Newman also said: “The sales premium Qualcomm can obtain from this will determine how successful Qualcomm can be in the field of artificial intelligence.”
Qualcomm’s diversification strategy also involves VR and AR devices. Amon said: “Meta, Microsoft, Google and Samsung are all our partners. We don’t know when people will buy their glasses products. But what we do know for sure is that this will be the next computing platform.”
Qualcomm is also trying to break into the highly competitive PC CPU market, where it competes with server giants such as Intel and AMD. In 2021, Qualcomm acquired CPU startup Nuvia for $1.4 billion.
Jay Goldberg, founder of chip consulting firm D2D Advisory, said: “For artificial intelligence and generative artificial intelligence, if this is a feature that consumers really want to use on their laptops, Qualcomm actually has a very good solution. So this may be a once-in-a-lifetime opportunity for Qualcomm to break into the PC market.”
