MW Intel and AMD take a backseat as Qualcomm plays starring role in Microsoft's AI PCs
By Therese Poletti
Chip maker Qualcomm is making real headway in the AI PC arena
When Microsoft Corp. unveiled a line of PCs and software this week designed to make the most of the artificial-intelligence revolution, it showcased a main processing chip - but it wasn't from the software giant's usual chip partner.
On Monday, Microsoft $(MSFT)$ unveiled a line of Surface PCs and tablets as part of a new category called Copilot + PCs with a rearchitected version of Windows 11. And instead of teaming with Intel Corp., they were all powered by a Snapdragon processor designed by Qualcomm Inc. $(QCOM)$.
Microsoft Chief Marketing Officer Yusuf Mehdi called the lineup "the most powerful Windows PCs ever built." While Microsoft CEO Satya Nadella mentioned long-time partners Intel $(INTC)$ and Advanced Micro Devices Inc. $(AMD)$ in his brief introduction on Monday, the star really was Qualcomm, with its Snapdragon Elite chips providing the core processing for PCs coming out as soon as June 18.
"It feels like Microsoft is saying, 'Intel we love you, but for our own Microsoft tablets it's Snapdragon now, and the IT world has a year or two to get up to speed and run Copilots, but this is the direction we want to go,'" said Olivier Blanchard, research director at the Futurum Group.
Investors were already familiar with Qualcomm's efforts to make headway in the AI PC arena, as it discussed its efforts on its most recent earnings call. It designs its chips around Arm Holdings Plc.'s $(ARM)$ processor designs, which consume much less power and account for its dominance in the smartphone market. Apple Inc. $(AAPL)$ now designs its own processors for Macs and iPads, with the M3 and M4 chips based on Arm architecture.
Read also: Microsoft's AI PC unveiling could help these chip stocks.
Intel, for its part, hosted a briefing with some reporters on Monday, ahead of the upcoming Computex trade show in Taiwan, where it will be sharing many technical details on its next-generation AI PC chip, codenamed Lunar Lake. Intel said its Lunar Lake processors will begin to ship in the third quarter, in time for the holiday season and that it will power more than 80 laptop designs from over 20 PC makers, "delivering AI performance at a global scale for Copilot+ PCs." A spokesman said that Intel's first AI PC chip, called the Core Ultra, was launched last December and has been in high demand.
Intel CEO Pat Gelsinger, Qualcomm CEO Cristiano Amon and AMD CEO Lisa Su all participated in Microsoft's Monday PC briefing via video, but the chip showcased on stage after their comments was the Qualcomm's Snapdragon Elite X. Microsoft noted that it "rebuilt Windows 11 inside-out for Arm," and favorably compared the battery-life improvements in the Copilot + PCs with Apple's Macs.
"I think there has been a shift in the last 24 hours of the AI PC ecosystem," Blanchard said. The Arm-based Qualcomm chips have a "better thermal envelope, longer battery life and are more tuned for AI workloads and multi-threaded performance."
One of the big reasons why Arm never took off at the PC level is the past was software compatibility, with all PC applications written for Intel's x86 architecture. But Blanchard noted that that is now changing for corporate applications.
"Qualcomm has been working on this for a really long time," he said.
Qualcomm is astutely jumping on the opportunity for the AI PC and the need for lower-power-consuming chips, because AI is incredibly compute-intensive. Whether it will make a serious dent in the PC market dominated by Intel, with rival AMD as the No. 2 player, is anyone's guess. But a new rivalry in the arena is at least going to make things interesting in PCs again.
-Therese Poletti
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May 25, 2024 08:32 ET (12:32 GMT)
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