Amazon Partners With Qualcomm for Custom AI Silicon to Support AWS Expansion
Amazon's cloud computing division, AWS, has partnered with Qualcomm to develop custom silicon chips as part of its broader strategy to expand artificial intelligence infrastructure. This collaboration marks a significant shift in the data center chip market and introduces Qualcomm into the hyperscaler supply chain alongside existing partners like Broadcom. The partnership is driven by Amazon’s massive demand for AI compute power, supported by an AWS backlog exceeding $496 billion and quarterly capital expenditures of $53.1 billion. Qualcomm aims to generate up to $15 billion in data-center revenue by fiscal 2029 through this multi-generational engagement with AWS. The deal involves custom silicon for inference workloads, as well as optical connectivity solutions. Qualcomm has already begun wafer production and expects initial revenue from the partnership starting in its December quarter. The move signals a broader trend of hyperscalers diversifying their chip suppliers to avoid dependency on traditional leaders like Broadcom. While this could help Qualcomm expand into new markets beyond smartphones, it also presents challenges such as lower gross margins for custom chips.
Topics: AI silicon AWS custom chips data centers Qualcomm