Qualcomm is rolling out a strategic initiative to enter China’s data center market with a line of hardware designed to comply with U.S. export restrictions. Speaking at the company’s investor day in New York this week, CEO Cristiano Amon confirmed that all four product lines under the Dragonfly umbrella—covering AI accelerators, data center CPUs, custom silicon, and connectivity chips—will be available in China within the bounds of current trade regulations.
A tailored approach to stay within export limits
Amon emphasized that Qualcomm has developed versions of every product in its Dragonfly lineup that meet U.S. export guidelines. During a conversation with Nikkei Asia, he stated, “We have versions of all of our products that comply with those guidelines.” The first product in this lineup, the AI250 AI accelerator, is slated for release next year and leverages the company’s near-memory HBC design instead of high-bandwidth memory (HBM) stacks, a choice that could prove advantageous in a market where HBM supply remains constrained. This packaging strategy mirrors the approach Nvidia and AMD have adopted, but with a focus on compliance over raw performance.
Market dynamics and revenue expectations
China contributed 46% of Qualcomm’s total revenue in 2025, primarily from smartphone silicon, underscoring the company’s reliance on the region. The data center unit is projected to generate $300 million in revenue for the current fiscal year and is expected to reach $5 billion by fiscal year 2027. Qualcomm anticipates that the total addressable market for data center AI chips could exceed $1 trillion by 2029, indicating a long-term bet on the segment’s growth.
The strategy hinges on Qualcomm’s existing relationships with Chinese smartphone and automotive manufacturers, which Amon believes can translate into data center adoption. The company has already introduced inference accelerators like the AI200 and AI250, unveiled last October, positioning them as alternatives to offerings from Nvidia and AMD. However, China’s regulatory environment presents challenges. In October, the country’s market regulator initiated an antitrust investigation into Qualcomm’s Autotalks acquisition, and local data center operators have been encouraged to source at least 50% of their chips domestically. Major tech firms like Alibaba, ByteDance, and Tencent have also been steered toward Huawei and Cambricon for their AI infrastructure needs.
A test of export-compliant strategies
Qualcomm’s move echoes a playbook previously used by Nvidia, which designed the H20 accelerator specifically for China. Despite these efforts, Nvidia’s H20 has struggled to gain traction, generating only about $50 million in revenue by late last year. Nvidia CEO Jensen Huang has publicly stated that the company now holds “zero” market share in China, suggesting that export-compliant hardware alone may not be sufficient to overcome local preferences. Qualcomm’s entry into the market, even with compliant hardware, may face similar hurdles, particularly as domestic alternatives like Huawei’s Ascend and Cambricon’s accelerators ramp up production.
Beyond China, Qualcomm has secured a significant deal with Saudi Arabia’s Humain, which has taken delivery of 1,024 AI100 systems and committed to deploying 200MW of Qualcomm racks. This international foothold could provide a buffer as the company navigates the complexities of the Chinese market. Whether Chinese data center operators will embrace export-compliant hardware remains an open question, but Qualcomm’s strategic pivot underscores the lengths companies are going to maintain access to one of the world’s largest tech markets.
AI summary
Qualcomm, ABD ihracat kısıtlamalarına uygun Dragonfly veri merkezi çiplerini Çin’e sunmaya hazırlanıyor. AI250 hızlandırıcılarının yerel pazarda nasıl bir etki yaratacağı merak konusu.
