Data centers are the backbone of AI, and Qualcomm is continuing its push to power them. The company has inked plans to acquire British hardware maker Alphawave Semi for $2.4 billion.
The purchase will help provide what it called “key assets” as Qualcomm expands its data center business, it said in a press release. The goal is to pair its processors with Alphawave’s high-speed connectivity and compute technologies to support increasingly intense AI workloads.
“If you wanted a super strong indicator that Qualcomm was serious about playing in the datacenter CPU market, this is it,” said Matt Kimball, VP and principal analyst at Moor Insights & Strategy.
What Alphawave brings to the table
Alphawave Semi has a wide offering of wired connectivity and compute technologies, including custom silicon, chiplets, application-specific integrated circuit (ASIC), and, notably, semiconductor intellectual property (IP). These are reusable building blocks of designs that can be used instead of starting from scratch, thus saving time and money.
Alphawave brings critical SerDes (serializer/deserializer high-speed data transmission) and interconnects IP, technologies that underpin how data moves between chips and systems in high-performance environments, explained Scott Bickley, advisory fellow at Info-Tech Research Group.
“This acquisition positions Qualcomm to deepen its presence in AI infrastructure and custom silicon for data center and networking customers, particularly hyperscalers and telecom providers building next-gen platforms,” he said.
Qualcomm says its Oryon CPU and Hexagon NPU processors are “well positioned” to meet growing demand for high-performance, low-power compute as AI inferencing accelerates and more enterprises move to custom CPUs housed in data centers.
“Qualcomm’s advanced custom processors are a natural fit for data center workloads,” Qualcomm president and CEO Cristiano Amon said in the press release. Alphawave’s connectivity and compute technologies can work well with the company’s CPU and NPU cores, he noted.
The deal is expected to close in the first quarter of 2026.
Complementing the ‘great CPU architecture’ Qualcomm has been amassing
Client CPUs have been a “big play” for Qualcomm, Moor’s Kimball noted; the company acquired chip design company Nuvia in 2021 for $1.4 billion and has also announced that it will be designing data center CPUs with Saudi AI company Humain.
“But there was a lot of data center IP that was equally valuable,” he said. This acquisition of Alphawave will help Qualcomm complement the “great CPU architecture” it acquired from Nuvia with the latest in connectivity tools that link a compute complex with other devices, as well as with chip-to-chip communications, and all of the “very low level architectural goodness” that allows compute cores to deliver “absolute best performance.”
“When trying to move data from, say, high bandwidth memory to the CPU, Alphawave provides the IP that helps chip companies like Qualcomm,” Kimball explained. “So you can see why this is such a good complement.”
It also fits in with other moves by Qualcomm, including partnerships it is entering into with the likes of Nvidia, he noted; Qualcomm plans to launch a custom CPU that can connect to Nvidia’s GPUs and software, which, given Nvidia’s prevalence across the AI IT stack, is a critical step.
“Draw a line out to a more distant horizon where AI stacks are being constructed and consumed in a more bespoke fashion, and I think Qualcomm is setting itself up nicely to be a prominent player,” he said.
Additionally, he noted, Qualcomm has an “interesting advantage” in that it doesn’t have the burden of supporting a legacy enterprise data center customer base.
“This allows it to support this custom approach without concern for how architectural ‘tweaks’ may impact tens of thousands of other customers,” Bickley pointed out.
Enterprises not likely to see impacts (yet)
While strategically important for the semiconductor and data infrastructure markets, for most IT leaders, the acquisition is “more of a signal to watch than a change requiring immediate action,” said Info-Tech’s Bickley.
“This move reflects a broader industry trend toward vertical integration in silicon design and an arms race around AI infrastructure scalability,” he said.
However, post-acquisition, IT leaders focused on AI, networking architecture, or long-term infrastructure planning should keep an eye on how Qualcomm evolves its product portfolio, particularly if it accelerates the availability of more power-efficient, high-bandwidth compute platforms.
“For the majority, this is a background development that reinforces larger shifts in the hardware supply chain rather than something that changes procurement or deployment strategies today,” said Bickley.