Qualcomm revealed a data center central processing unit called Dragonfly C1000 on Wednesday and announced Meta as its first major customer, with production scheduled to start in 2028. The chipmaker made the announcement at an investor presentation, stating the new CPU was built for agentic AI and focuses on delivering computing performance with reduced power consumption. The move represents Qualcomm's aggressive push into the data center market as the company seeks to diversify beyond its core smartphone business, which accounted for two-thirds of product revenues in the quarter ended in March.
Qualcomm Dragonfly C1000 Targets Agentic AI Workloads
The Dragonfly C1000 is designed specifically for agentic AI applications, according to Qualcomm's announcement at the investor presentation. The chipmaker emphasized the product's focus on offering computing performance without excessive power consumption. Qualcomm CEO Cristiano Amon stated at the investor day, "We just been executing, collecting assets, and when we got to this point, we feel that we have a comprehensive portfolio to enter the next phase of the data center."
The company presented a roadmap targeting the data center market with several different products, including an AI chip and a product that will tie multiple chips together. Qualcomm CFO Akash Palkhiwala said in an interview that the company already has business with nearly every hyperscaler through its smartphone chips and other existing products. "This is not a new relationship. It's the benefit of what we've delivered to them already on the edge, combined with the scale and the expertise and the confidence in Qualcomm, is what makes them engage with us on data center," Palkhiwala said.
Meta Signs as First Major Customer for 2028 Production
Meta will use the Dragonfly C1000 when production starts in 2028, Qualcomm announced on Wednesday. The company also stated it had secured two deals to make custom silicon chips for hyperscalers, though specific details about these agreements were not disclosed.
Palkhiwala addressed market supply concerns, stating, "There really isn't enough supply, and multiple players are needed" in the CPU market. The announcement comes as investor interest in CPUs is rising, with experts believing central processors will take on more workload from graphics processing units and AI chips due to AI agents that run autonomously.
Qualcomm Expands Data Center Portfolio Beyond Smartphones
Qualcomm's primary business in recent years has been smartphones, which accounted for two-thirds of the company's product revenues in the quarter ended in March. The company is seeking to diversify into cars, robots, and the data center, which are faster-growing markets for chips than the smartphone sector. The smartphone market peaked in terms of shipments in 2017, according to estimates.
The chipmaker stated that its expertise at making smartphone and PC chips that conserve battery life will serve customers like hyperscalers, which are increasingly building data centers where the limiting factor is electrical power. CEO Amon told investors that the company was not entering the data center market too late: "When people ask about if it's late to enter the data center, you should think about scale and execution, or engineering capabilities, or operations and supply chain."
Qualcomm Acquires Modular for AI Software Capabilities
Qualcomm announced it had acquired Modular for an undisclosed price. The startup made software that enables AI applications to run on a broad range of chip architectures. Qualcomm stated that Modular's technology is an equivalent to Nvidia's CUDA, which is used in many AI applications.
FAQ
What did Qualcomm announce on Wednesday regarding data centers?
Qualcomm revealed a data center CPU called Dragonfly C1000 on Wednesday and announced Meta as its first major customer, with production scheduled to start in 2028. The chipmaker made the announcement at an investor presentation.
Why is Qualcomm entering the data center market?
Qualcomm is seeking to diversify beyond its core smartphone business, which accounted for two-thirds of product revenues in the quarter ended in March. The company is targeting faster-growing markets including cars, robots, and data centers, as the smartphone market peaked in shipments in 2017.
What company did Qualcomm acquire for AI software capabilities?
Qualcomm acquired Modular for an undisclosed price. The startup made software that enables AI applications to run on a broad range of chip architectures, which Qualcomm says is equivalent to Nvidia's CUDA technology.
