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The race for AI PCs: Who’s winning and what’s at stake

Written by Nikkei Asia Published on   5 mins read

Intel, AMD and Qualcomm all hope to reignite the computer market, but will users bite?

Chipmakers are hailing the artificial intelligence boom as the “biggest change” in a decade for personal computers and a moment of rebirth for the sluggish PC market. But the rush to capitalize on the moment is bringing new players into a segment traditionally dominated by Intel and AMD.

Ambitions for the coming era of PCs optimized for AI were on display earlier this month at the Computex trade show in Taipei.

“The PC is really reborn,” Qualcomm CEO Cristiano Amon told reporters at the event. “AI is completely redefining the personal computer experience,” he added, comparing it to the introduction of the Windows 95 operating system nearly 30 years ago.

Qualcomm, the world’s leading smartphone chip developer, is betting big on the notebook computer space. Its Snapdragon X Elite chip will be used in HP, Dell, Lenovo, Acer, Asus, and Microsoft computers that are set to hit the market as early as this month. These will be the first commercially available laptops that meet Microsoft’s definition of an AI PC, namely having enough processing power to handle more than 40 trillion operations per second (TOPS).

Operations per second is a measure of computer processing power, with AI computing requiring a figure in the trillions.

Intel, long the leading maker of central processing units (CPUs) for PCs, has already introduced its latest chipset, the neural processor-equipped Lunar Lake, which offers 48 TOPS. But laptops powered by this chip will not be available until the fall.

“We expect that by 2028 80% of all PCs will be AI PCs, and Intel is leading the way,” Intel CEO Pat Gelsinger said during his keynote at Computex, adding that more than 8 million PCs equipped with its Intel Core Ultra chip had been shipped since its release in December 2023.

Smaller rival AMD has unveiled what it claims is the world’s “most powerful” AI computer chipset, the Ryzen AI 300 series, which can run 50 TOPS. AMD said notebook computers with these chips will be available from July, earlier than market expectations.

“This is probably the biggest change in the PC form factor, certainly in the last decade,” Lisa Su, AMD’s CEO, told reporters at Computex.

One of the main selling points of AI PCs will be the ability to offer features and applications previously only available by connecting to a cloud service. Some early examples include simultaneous translation, transcribing meetings in real time and having an AI assistant that can answer questions in a conversational way.

This “biggest change” has implications for the very structure of the PC chip industry.

For many years, Intel and AMD have been the leading makers of CPUs for PCs, with a combined market share of 86%, according to Counterpoint’s most recent data. These processors use the X-86 chip architecture, which is known for its higher performance. The processors used in most smartphones and tablets, by contrast, are based on the architecture of UK chip company Arm. These processors are energy-efficient, making them ideal for mobile devices such as smartphones and wearables, but typically do not offer the same level of computing power as X-86 processors.

But advances in AI and chip production technology mean Arm-based processors could soon be both powerful and energy-efficient.

Qualcomm’s Amon said estimates that 50% of PCs will run on Arm’s architecture in the coming years made sense. With the adoption of Copilot+, Microsoft’s AI platform, he said, “I expect that the transition this time will be faster than any other version of Windows. … That’s kind of the opportunity we have.”

Apple is the most prominent example of a major PC maker replacing Intel’s CPU with its own alternative based on Arm’s architecture. Introducing these chips for its MacBooks in 2020 has already helped Arm-based PC chips secure about an 11% market share, according to Counterpoint data.

Arm CEO Rene Haas told reporters on June 3 that he foresees “Windows on Arm” PCs having a dominant market share in the next decade.

MediaTek, another leading mobile chipmaker specializing in Arm-based chips, and Nvidia, whose popular AI chips are used primarily in servers, are also working together to develop chips for notebook computers.

Anthony Peter Bonadero, the new president of major contract computer maker Compal Electronics, said Qualcomm has the advantage of “time-to-market,” as its Snapdragon X Elite chip was available earlier than Intel and AMD offerings. In addition, the Arm-architecture means the Snapdragon is energy efficient and enables good battery life.

“The performance is much better [and] the battery life is amazing,” said Bonadero, who has been in the PC industry for 30 years. “We will start to see Arm lifts.”

William Li, senior tech analyst with Counterpoint, said Arm-based notebook PCs will account for up to 15% of the market this year, and up to 20% by 2027, as more players join the race.

“Previously in the notebook PC area, Intel and Windows were dominant players, but now Microsoft is working with Qualcomm on a big launch of new AI PCs. That could tell you something,” Li said. “We do see Intel’s market share could face some pressure if the [Arm-based] products prove to be competitive.”

Competitive is the operative word. Industry executives and market watchers say success will depend on whether consumers find the new features offered by AI PCs appealing, regardless of whether those computers are running on Arm- or X-86 platforms. Most market research companies expect only minimal growth in total PCs shipments this year.

“Currently, we haven’t really seen any intriguing killer applications on the so-called AI PCs,” Chaney Ho, a computer industry veteran and former president of Advantech, told Nikkei Asia. “Whether consumers will really go out and buy these AI PCs is still unknown.”

Jeff Lin, tech analyst with Omdia, said the so-called AI PC era is just beginning. “Generative AI is only a part of the AI PC ecosystem. The user interface and user interactions with PCs could be massively transformed. … However, it will take time, till about 2028, for the AI ecosystems and AI assistants’ new user interface on PCs to evolve and become mainstream.”

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.


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