Tech companies from Microsoft Corp. to Qualcomm Inc. are embarking on a marketing blitz for a new type of computer they are dubbing “AI PCs,” promising artificial intelligence features embedded in their laptops and desktops.

The new laptops differ from standard devices with the inclusion of an additional processor that’s tailored to speed up AI features like personal assistants and the ability to automate tasks.

But only 3 per cent of PCs shipped this year will meet Microsoft’s processing power threshold to be considered an AI PC, according to industry research firm IDC. To persuade consumers and corporations that it’s time to buy, the industry will need to offer a wider variety of the PCs and deliver software that takes advantage of the new hardware. 

So far, analysts and reviewers also are taking a skeptical tone toward the new laptops’ artificial intelligence abilities. Usefulness is limited because few software makers beyond Microsoft are building features to utilize the new chips in the machines optimized for AI tasks, said Eric Compton, a financial analyst focused on the PC industry at Morningstar.

Application makers like Adobe Inc., Salesforce Inc. and SentinelOne Inc. rebuffed one of the largest PC makers when it asked them to tweak software so AI tools could be used directly on the new computers in time for the launch, according to a person familiar with the discussions. All of those companies deliver AI features through the cloud.

SentinelOne is looking at optimizing its products for AI PCs in future development, but it will likely take years for these devices to reach a “sufficient proportion of deployed machines,” Gregor Stewart, the company’s vice president of AI, said in a statement. Clara Shih, who leads Salesforce’s AI efforts, said the company is developing on-device language models, the technology that underpins many types of generative AI, but didn’t provide any expected timeline for release.

Some smaller software makers optimized their apps for on-device AI. That includes Blackmagic Design Inc., which makes video-editing software that competes with Adobe’s Premiere, and Algoriddim’s music-mixing tool djay.

For now, available AI features are largely gimmicks, said a Best Buy Co. employee shortly after launch in June, who asked not to be identified for fear of professional repercussions. Machines known as “Copilot+ PCs” are limited to features like a tool that makes it appear you are looking at the camera during a video meeting when in reality your eyes are focused elsewhere. Generative AI models can be used to produce images on the device, but still require internet connection for content moderation. A flagship Microsoft feature that would let a user easily find past activity on their computer, called Recall, was delayed due to privacy concerns.

A Microsoft spokesperson said developers have “shown great enthusiasm” in building apps to use the new hardware and user feedback for the new devices has been “terrific.”

The stakes are high for many of the companies involved. Qualcomm, the provider of the new chips, says it’s ready to challenge Intel Corp.’s dominance in the machines. PC makers like Dell Technologies Inc. and HP Inc. hope the machines will fuel consumer excitement for personal computers again. But the companies will need to ensure performance matches the marketing to avoid previous dead ends – like Windows short-lived mobile operating system or detachable screens.

An HP spokesperson said the company is working with software vendors to build new experiences for the AI PC while touting existing features like real-time translation.

Even if features are currently limited, AI PCs have the potential to fuel a wave of new higher-priced purchases. Many consumers, businesses and schools bought laptops in the early months of the pandemic, but haven’t yet upgraded. New AI capabilities will help steer buyers toward higher-end options, Michael Dell, founder and chief executive officer of the namesake company, said in a May interview. “Do you want to buy a PC that is not capable of doing those AI things that you’ll want to do in the future? I don’t think so.”

There are early signs of traction. A fifth of computers sold during launch week were AI PCs, according to data provided by market researcher Circana. Tech-savvy consumers like content creators have been quicker to adopt the new machines, while the general public is likely still a bit “confused,” said Mike Crosby, executive director at Circana.

The other major selling point is better battery life than other laptops that use Microsoft’s Windows operating systems. Qualcomm claims its more-efficient chips based on Arm Holdings Plc designs can mean days of use without charging. Avi Greengart, an industry analyst at Techsponential who helped host a Qualcomm promotional event, said in an interview that battery life rather than AI is the main selling point of the laptops at this point.

But the different chips also raise the potential for compatibility issues with generations of software written for Intel or Advanced Micro Devices Inc. processors. Common apps like Microsoft Office, Meta Platforms Inc.’s WhatsApp and Adobe’s Photoshop have been optimized for the Arm-based systems. But many legacy applications still used within businesses will not be supported, likely capping adoption among enterprises, said Erik Woodring, an analyst at Morgan Stanley.

Qualcomm acknowledges it has to step up efforts to promote its brand and help PC makers with advertising. That’s necessary because the industry has relied on Intel for promotional dollars for decades under arguably the most successful component campaign ever: “Intel Inside.” Consumers in particular have been trained to see that label on their computers as a sign of quality. And Intel has even managed to bring sub brands to the forefront. Its Centrino push in 2003 led to an explosion in notebook use with the inclusion of Wi-Fi connections.

Qualcomm, which has tried and failed previously to grab a piece of the PC market, is spending more than US$75 million per year to print the name of its Snapdragon processor on the jerseys of Manchester United Football Club players. It has also upped its payments to partners like PC makers to help support marketing, said Chief Marketing Officer Don McGuire. 

“This is a moment, but this has to be a sustained thing,” McGuire said. “It’s about the next six years, not the the next six months.”

Average starting prices for the new slate of Qualcomm-based AI PCs are about 48 per cent more expensive than their non-AI counterparts, wrote Samik Chatterjee, an analyst at JPMorgan Chase & Co. He sees Qualcomm owning about 25 per cent of the AI PC market by 2026. 

Later this year, Intel and AMD are expected to release their own AI PCs, which are likely to have fewer of the compatibility issues associated with Arm-based devices. 

Still, it’ll be a long road to get consumer and business adoption. In 2026, AI PCs will still only make up about 20 per cent of new PC shipments, according to IDC.