By Adam Levine

Sailesh Kottapalli, formerly an Intel Fellow and lead architect for Intel's Xeon line of data center chips, announced this week that he recently joined Qualcomm as a senior vice president.

Kottapalli's title at Intel indicates he was a top engineer there, and his new title at Qualcomm reveals that he will be taking on a senior role there.

Kottapalli's move could represent something of a shake-up in the chip world since Qualcomm doesn't currently make a data center chip. By bringing in a senior VP whose expertise is in that area, it could indicate that Qualcomm, long synonymous with smartphone chips, is continuing its project to diversify its sources of income.

Intel, meanwhile, has struggled in recent years, as Nvidia dominated the AI chip world, and other chip makers earned wins in the mobile area. Since April 2021, its shares are down 71%, while the S&P 500 index is up 42%. Qualcomm stock is up 13% over that period.

"While there is never a suitable time to end a journey, I feel good about where Xeon is right now and what is coming up next," Kottapalli said in a LinkedIn post. "Intel holds a special place in my heart, and I will continue cheering for its return to greatness."

Qualcomm and Intel didn't immediately respond to requests for comment about the move.

At Qualcomm's November investor day, the company forecast it would be making new efforts in the coming months. "We're successfully executing against our diversification strategy," Qualcomm CEO Cristiano Amon said at the time. "There is a significant opportunity for growth across all the target industries."

So far, Qualcomm has made inroads around chips for PCs, cars, and in the internet-of-things arena, including smart TVs and virtual reality headsets. Now Qualcomm may be preparing chips for data centers, where gross margins are higher than in those other markets.

Qualcomm's interest in data center chips goes back to its 2021 acquisition of Nuvia. Nuvia was founded in 2019 by Gerard Williams, who had previously been Apple's chip design lead. Williams is now the lead engineer at Qualcomm. Nuvia was working on a data center chip when it was acquired, but thus far Qualcomm has only made chips for smartphones, PCs, and cars using Nuvia's technology.

Kottapalli's move to Qualcomm suggests data centers could soon be added to that mix.

Write to Adam Levine at adam.levine@barrons.com

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January 14, 2025 11:31 ET (16:31 GMT)

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