Qualcomm AI PCs Set to Challenge Intel’s Dominance

PC makers are fighting to take advantage of the demand for artificial intelligence tools, while the competition is just as intense among the chip companies that provide the brains of the machines. But first…

Three things you need to know today:

Google’s moonshot team is ratcheting back its history of excess.
Sonos unveiled its first over-the-ear headphones.
Apple will ask a judge to throw out an antitrust suit against the company.

Is This Time Really Different?

Microsoft Corp.’s Build conference this week has centered on yet another attempt to fire up enthusiasm for a device that we all use but few get excited about: the PC.

Chief Executive Officer Satya Nadella’s presentation on the company’s new computers featured videos from the leaders of three chipmakers: Intel Corp., Advanced Micro Devices Inc. and Qualcomm Inc. But Qualcomm’s Cristiano Amon stood out, sporting a T-shirt featuring the new Microsoft “Copilot+PC’’ branding. If he looked like he was enjoying things a bit more than Intel’s Pat Gelsinger and AMD’s Lisa Su, it’s because, for many, this was a breakthrough moment for the industry and his company.

The Rise of AI-Focused PCs

The new package of AI-focused features will initially only work on machines powered by chips from Qualcomm, a maker of smartphone components that’s been trying to grab a foothold in laptops for years. Companies like Dell Technologies Inc. also announced new “AI PC” models based on the Qualcomm chips. They’ll go on sale in June, and Microsoft was keen to point out that they’ll be much faster than Apple Inc.’s Macs, a line of machines that’s long been touted as benefiting from its unique hardware.

Another Microsoft executive took to the stage and projected that 50 million AI PCs will be shipped over the next 12 months. That’s already a significant portion of the 250-million-unit worldwide market, indicating the new category is likely off to a flying start. But under the hood of that bullish projection is a stark reality that Qualcomm and Microsoft will have to work hard to change.

The Branding Flexibility Challenge

The forecast includes notebooks that Microsoft and others have already branded AI PCs, even if they can’t and won’t run the new AI features. Intel, whose chips have dominated PCs since they came into being in the early 1980s, recently said it’s on course to ship more than 40 million AI PCs this year. That speaks to both the flexibility of the branding and the challenge ahead for Qualcomm.

The Mobile Technology Struggle

Outside of Apple, which has about 10% of the PC market, bringing mobile phone technology to the heart of the PC has been a largely fruitless exercise. Designs from Arm Holdings Plc – used by Apple in its chips – have long been touted as providing much better battery life in thinner and lighter machines such as laptops. Even Nvidia Corp. has tried in the past and found it couldn’t make progress in the category against Intel.

Intel’s Ecosystem Dominance

As AMD’s slow and steady gains over an extended period show, it’s not easy to take on Intel — even with superior products. The problem any competitor has is Intel’s dominance of the ecosystem. For years, Intel has provided not only components, but much of the technology that has gone into PCs. All the peripherals that connect to PCs and the software that’s used on them are usually tuned to work on Intel-based machinery first. The chipmaker is also central to how PCs are marketed and sold, supplying branding and providing massive funding for advertisements.

Qualcomm’s Steep Climb

Qualcomm, with Microsoft’s help, will need to spend heavily to overturn this and, perhaps more importantly, provide users with a good reason to look at the computers powered by its Snapdragon chips.

Snapdragon’s Edge in AI

The new machines use a type of processor that Intel and AMD aren’t offering, at least not with the same level of capabilities. The component is designed to speed up AI tasks without crippling battery life.

The Computex Showcase

At Computex in Taipei at the start of June, Dell will be joined by Lenovo Group Ltd. and Asustek Computer Inc. among countless others showing off their first iterations of Qualcomm-powered Copilot+ PCs. That’ll be the first and best opportunity for the wider public to experience what all of this week’s hoopla is about.

A Decade of Attempts

It’s been more than a decade since the first version of Windows for mobile technology was announced. Windows RT and the Qualcomm, Texas Instruments Inc. and Nvidia chips that were supposed to run it were at Computex way back then too — though they are barely side notes in PC history today. Will the new AI hardware strike a chord, and will this time be different?

The Clock is Ticking

Qualcomm may not have long to deliver on that promise. Intel and AMD have plans to update their products to support the software that runs the AI features. Looming is Nvidia, the top maker of chips for servers that have powered the leap in AI capabilities. When asked by Bloomberg if he was going to re-enter the PC market, Nvidia CEO Jensen Huang didn’t get time to answer. Michael Dell laughed and interrupted the joint interview at the computer maker’s conference earlier this week to say, “Come back next year.”

The Big Story

Chip equipment maker ASML Holding NV and Taiwan Semiconductor Manufacturing Co. have discussed ways to disable the most advanced machinery to produce semiconductors if China invades the island of Taiwan. The “kill switch” can remotely shut off ASML’s sophisticated chipmaking machines used by TSMC if Taiwan comes under attack.

Get Fully Charged

Panasonic will try to improve the profitability of its underperforming units while considering whether it’s the “best owner” for the businesses, CEO Yuki Kusumi said.

Holistic AI Funding

Holistic AI, now called H, has raised $220 million in an initial round of fundraising.

Alibaba and Baidu Clash

Alibaba cut the prices for AI services, sparking a response from Baidu.

Scale AI’s Valuation

Scale AI was valued at almost $14 billion as it raised $1 billion.

Conclusion

The battle for dominance in the AI-powered PC market is heating up, with Qualcomm making a significant push to dethrone Intel. While Intel’s stronghold on the PC ecosystem remains formidable, Qualcomm’s innovative AI-focused Snapdragon chips, supported by Microsoft, offer a promising alternative. The future of AI PCs is bright, but Qualcomm faces a challenging road ahead, with competition from established players and the need to win over a market accustomed to Intel’s dominance. The coming months will be crucial in determining whether Qualcomm can truly revolutionize the PC industry.

FAQs

1. What is Qualcomm’s main advantage over Intel in AI PCs?

Qualcomm’s Snapdragon chips are designed to handle AI tasks efficiently without draining the battery, offering better performance for AI applications compared to traditional Intel processors.

2. Why has Intel dominated the PC market for so long?

Intel has built a comprehensive ecosystem, providing not just the chips but also the supporting technology, software compatibility, and significant marketing support, making it difficult for competitors to gain traction.

3. How are AI PCs different from traditional PCs?

AI PCs are equipped with processors specifically designed to handle AI tasks, improving performance in applications like voice recognition, image processing, and predictive analytics.

4. When will Qualcomm’s AI PCs be available to the public?

Qualcomm’s AI PCs, produced by companies like Dell, Lenovo, and Asustek, are expected to go on sale starting in June.

5. What challenges does Qualcomm face in the AI PC market?

Qualcomm needs to overcome Intel’s entrenched ecosystem, gain market acceptance, and convince users of the benefits of its AI-focused technology to achieve significant market share.