• CoPilot+ AI PCs have increased the importance of silicon vendors, triggering the entry of many new players.
• Qualcomm, Apple, and more, are challenging Intel and AMD by building upon the success of low-power Arm-based edge devices such as smartphones.
• AI PCs will accelerate the PC replacement rate, bringing newer experiences and newer silicon players to software and ensuring healthier competition.
• ARM vs x86 is the battle to watch out for, similar to the Mac vs Windows rivalry.

Microsoft and its partners announced the first Windows-based CoPilot+ PCs at Microsoft Build in May 2024. CoPilot+ AI PCs are specially designed with advanced ‘on-device’ AI capabilities such as multimodal Generative AI in mind. These PCs leverage the power of Neural Processing Unit (NPU) within the processing System-on-Chip (SoC) with baseline of 40 TOPS of processing power for AI workloads. This elevated the importance of silicon vendors to provide powerful AI experiences at the edge and in the cloud as we are seeing with NVIDIA, AMD and Intel. This has triggered the entry of newer silicon vendors such as Qualcomm, Apple, and more, to challenge Intel and AMD by building upon the success of low-power Arm-based edge devices such as smartphones.

Qualcomm’s Growth Story in AI PC Beckons

To everyone’s surprise, Qualcomm, a late entrant in the PC space, was the first and only chip vendor to announce 20+ design wins at the event with Microsoft and OEM partners. Qualcomm’s Snapdragon X series laptops started shipping in June 2024. Qualcomm Snapdragon X Elite-based laptops featured its popular and generationally ahead Hexagon NPU (building upon mobile expertise), Arm (+Nuvia) custom core-based Oryon CPU architecture, Adreno GPU, Spectra ISP and other capabilities built on TSMC 4nm process node bringing best in class heterogeneous AI performance at low power, a big differentiator for the world’s leading smartphone SoC vendor.

Source: Qualcomm

Qualcomm followed the X Elite (12-core) with its next lower tier Snapdragon X Plus (10-core) SoC platform in the run-up to Computex with devices shipping in Fall 2024. Qualcomm also announced Snapdragon X Plus (8-core) with devices shipping in 2025. In total, Qualcomm had 58 design wins that have already been launched or are in development.

We believe Qualcomm’s slow start as a new entrant will ramp up moving forward. For example, according to our Global PC Chipset tracker, Qualcomm’s Snapdragon X series should help the vendor capture more than 10% share in the premium $1,000+ laptop PC segment in CY2025, growing 184% after capturing a 4% share of the key premium laptop PC segment in CY2024. In the overall laptop PC market, Qualcomm’s share should reach around 4% in CY2025, surging 224% YoY. At the recent Qualcomm Investor Day, the vendor set out a target of 10%-12% market share in the laptop PC market by 2029.

Source: Qualcomm

Qualcomm’s strong ecosystem and support from Microsoft, software applications and data model vendors will be crucial for the success of Windows on Snapdragon going forward. Striking the right channel partnerships with OEM vendors will also be an important factor.

AMD Nicely Positioned to Challenge Intel in x86 share of AI PC Market

The fast-growing incumbent AMD also launched its very capable Ryzen AI 300-based (Strix Point) processors unlocking CoPilot+ experiences on AMD-based laptop PCs, shipping in the summer of 2024. These chips implement a combination of the AMD ‘Zen 5’ microarchitecture for the CPU cores, the XDNA 2 architecture for its powerful new NPU, and the RDNA 3+ graphics architecture. AMD also followed up with Ryzen AI 300 Pro in October, targeting CoPilot+ PCs for enterprise. AMD boasts more than 100 design wins through 2025.

Source: AMD

AMD has also been working closely with its ISV partners to optimize its software on the latest AMD Ryzen AI chipsets. We believe AMD is nicely positioned to become the leader in the CoPilot+ PC space with its Strix Point, despite strong competition in the consumers and enterprise segments.

Source: AMD

Intel is Improvising to Protect its Share in This AI PC Wave

Intel, came in late to the CoPilot+ AI PC party with Lunar Lake which is a more of a water-downed version of Meteor Lake but packs in a 48 TOPS NPU to accelerate AI workloads, Arc 140V GPU, first x86 processor to integrate DRAM directly within processor package (using Intel Foveros) driving better power efficiencies and manufactured at TSMC’s advanced and more efficient nodes.

Source: Intel

However, Intel still enjoys strong brand pull and mindshare across channels and consumers, which it has nurtured over decades. It is not going to be easy on the ground for Qualcomm or AMD to take the lion’s share immediately. It will depend on whether Intel can solve the corporate, foundry and industry mindshare issues and if it can continue to churn out great products, maintain channel mindshare without much of the traditional funding and stop bleeding its market share.

Apple Charts its own Path with M-Series Processor and Apple Intelligence

Apple’s pivot to its in-house Arm-based Apple Silicon M-series a few years ago was a bold move and a masterstroke. Having consistent silicon architecture across all its products from iPhones to iPads to Macs brings instant scale for Apple and its ISVs. This was a blessing in disguise for Apple despite being perceived as joining late to the AI party (software and data models vs Microsoft) as Apple could atleast redesign its NPU capabilities with M4 series of SOCs for future AI workloads (external or internal with Apple Intelligence) and leveraging the most advanced process nodes at TSMC.

Source: Apple

At WWDC, Apple unveiled the Apple Intelligence along with its strategy to deliver privacy-centric and personalized AI experiences for both on-device and cloud-based AI workloads with improved performance and efficiency. However, the only caveat is that Apple’s vertical integration and premium focus somewhat limits its TAM compared to the versatile premium-to-mainstream-to-mass market targeting the Windows ecosystem and Microsoft’s lead in the Gen AI experience, from in-house cloud expertise and sticky enterprise solutions to key AI partnerships such as OpenAI.

NVIDIA’s AI PC Strategy Premium and Differentiated

NVIDIA has been one of the leading vendors enabling the AI and Gen AI ecosystem with the lion’s share of the AI Server Compute market in terms of units and revenues. In the AI PC market, NVIDIA had the most powerful compute in form of its RTX Series with compute capability reaching almost 200 TOPS.

Source: NVIDIA

With such a strong installed base of AI-capable PCs, NVIDIA can optimize its software and models to deliver premium ‘RTX AI PCs’ play across most use-cases from content editing and creating AI workloads, to Agentic CoPilot+ AI or AI in gaming with technologies such as DLSS.

NVIDIA also has tremendous potential to expand its AI PC ambitions moving forward with high-performance GPU compute in the future, paired with Arm-based SoC (in-house or via strategic partner).

Potential New Entrants:

As the Arm-based PC ecosystem expands, there is an opportunity for the likes of MediaTek or Samsung on one end and other RISC-V-based solutions (especially from China ecosystem) to enter this space. However, the success in the AI PC market all boils down to right product, key design wins, ISV and data model partnerships and finally how you nurture the channels from training to rewards.

Key Takeaways:

• There has never been such an intense competition in PC market.
• First Trigger: Apple’s successful move to Arm-based Apple Silicon was the first trigger to replicate the success in Windows ecosystem bringing performance at lower power vs x86 architecture.
• Second Trigger: Entry of Gen AI-capable Models and applications such as CoPilot+ and baking those capabilities at software and silicon level to help Windows ecosystem rethink productivity, creativity and play on PCs with efficient resource-intensive processing.
• The PC market is growing modestly. However, the AI PC market will accelerate the replacement rate, bringing newer experiences and newer silicon players to software and ensuring healthier competition.
• ARM vs x86 is the battle to watch out for, which is the new Mac vs Windows battle. Click here to view our take on how this battle might pan out.
• Qualcomm and NVIDIA are the ones to watch out for in terms of growth. Meanwhile, AMD and Intel will compete to dominate the x86 landscape.