Qualcomm bets on inferencing in the cloud, which Arm says can’t run it all it forever
Awkward, seeing as they’re close partners
Simon Sharwood
Thu 6 Nov 2025 // 04:03 UTC
Qualcomm and Arm have offered differing predictions regarding the market for inferencing silicon.
Both companies announced quarterly results on Wednesday and Qualcomm CEO Cristiano Amon used his company’s earnings call to add a little more color to last week’s news that his company will enter the datacenter market with chips designed to run inferencing workloads while using less energy than required by rivals’ hardware.
Amon said Qualcomm is building a system on chip and a “card” for its forthcoming inferencing hardware, because “AI data center growth is moving from training to dedicated inference workloads, and this trend is expected to accelerate in the coming years.”
Arm CEO Renee Haas agreed that energy consumption is a “bottleneck” in the datacenter, and that demand will shift from training to inference.
But he thinks some of the action will move outside bit barns.
“What we're seeing is all kinds of demand for different architectures and compute type of solutions to run inference not in the cloud,” he said on Arm’s earnings call. “Obviously, you're going to not rely 100 percent on something on the edge. But today, it's the reverse. It's about 100 percent on the cloud. And we think that is going to change.”
Both CEOs are probably correct about surging demand for inferencing capability. Arm will likely do well wherever the workloads land. Amon, however, said Qualcomm won’t have “material” datacenter revenue to report until 2027.
The CEO had happier news in the form of record quarterly sales for automotive chips ($1.1 bn), which he said demonstrates Qualcomm is now a leader in the field. He expressed optimism the company’s PC chips have potential for growth, and pointed to strong sales and growth of modems and similar comms technology – and having achieved that after Apple decided to build its own modems instead of buying them from Qualcomm.
Amon took the time to mention the company’s relationship with Samsung – perhaps in light of the Korean giant’s remarks last week that it intends to strengthen its own high-end smartphone processors after using only Qualcomm kit in its Galaxy S25 range. Amon said Qualcomm assumes it will provide 75 percent of Samsung’s processor needs in the Galaxy S26, and is content with that. He also declared himself pleased with the uptake of Qualcomm kit by other premium-grade handset-makers.
Qualcomm revenue for Q4 was $11.27 billion, up 10 percent year-over-year. Full year revenue of $44.3 billion represented 14 percent growth. Full year net income fell 45 percent to $5.5 billion, mostly due to changes to US tax law that saw Qualcomm book a non-cash $5.7 billion charge.
The company’s shares started the day at $174.76 apiece, peaked at $182.98 and then settled to $175.01 in after hours trading.
Arm flexes
Arm announced quarterly revenue of $1.13 billion, representing 34 percent year-over-year growth.
Japan’s Softbank now owns the chip design firm and is also a major part of OpenAI’s “Stargate” project to build a fleet of massive datacenters around the world. Haas said being owned by Softbank therefore means Arm has “a huge opportunity.”
“If you think about what's associated with building out these data centers, you have the compute, obviously, you have the networking, you have everything associated with power distribution, you have a potential technology that gets into the power mechanism of the data center and then everything associated with even potential assembly of the data center,” he said. “So as a result of all the work that SoftBank and the SoftBank family of companies are doing, it provides huge opportunity for Arm to provide solutions into that space.”
“So if nothing else, I think the opportunity for compute has only grown since we made that Stargate announcement.”
CFO Jason Child told investors Arm’s revenue from royalties “exceeded our expectations, growing 21 percent year-on-year to a record $620 million versus our guidance of mid-teens.”
Child said the biggest contributor to that growth was smartphones, but “higher royalty rates per chip and in data center where we continue to see share gains from custom hyperscaler chips” certainly didn’t hurt.
The CFO also pointed to “share gains from custom hyperscaler chips,” a likely reference to the custom accelerators that longtime Arm collaborator Broadcom is baking for several large clients. He predicted good times ahead as makers of smartphones adopt Arm’s Lumex compute subsystems (CSS).
“This project took around 1,000 man-years with a team size peaking over 450 engineers and required hundreds of millions of dollars in investment,” he said. “Lumex CSS has attracted strong market interest and we're already seeing royalty revenue from an early licensee.”
Which he declined to name, but did say it was not the customer’s first collaboration with Arm on a compute subsystem.
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