Qualcomm Announces Multi-Generational Custom Chip Deal with Amazon, Sending Stock Up Over 9%
On September 8, Qualcomm announced a multi-generational collaboration with Amazon to develop custom AI chips and next-generation optical networking for AWS data centers. The deal includes the production of multiple chip generations optimized for AI inference as well as high-speed connectivity solutions leveraging technology from Alphawave Semi. In addition, Amazon received a warrant allowing it to purchase up to 25 million Qualcomm shares at $161.26 each, valued at approximately $4 billion. The announcement led to an immediate surge in Qualcomm's stock price, which rose over 9% during premarket trading and reached as high as 10%. This marks a significant turnaround for the company after struggling with weaker smartphone demand earlier this year. The deal also expands Amazon’s influence by having both companies now serve each other—Qualcomm supplying chips while using AWS infrastructure to accelerate its design processes. The partnership challenges the current dominance of chipmakers like Broadcom and Marvell in hyperscaler custom silicon co-design work, positioning Qualcomm as a key player in an expanding AI server market. Analysts suggest that breaking into this space is crucial for Qualcomm’s long-term growth strategy.
Topics: AI chips custom silicon data centers optical networking stock movement