Qualcomm Secures $60 Billion AI Deal with Amazon
Qualcomm has secured a long-term partnership with Amazon valued at up to $60 billion, involving data center chips and technology for AI inference. The deal includes warrants allowing Amazon to purchase up to 25 million Qualcomm shares at $161.26 each, potentially worth around $4 billion. This agreement validates Qualcomm's strategy of expanding beyond smartphone chip manufacturing into the growing AI infrastructure market. The partnership spans multiple generations of custom silicon for Amazon Web Services and includes optical connectivity technology capable of speeds up to 1.6 terabits per second. The deal also highlights a trend where major tech companies are becoming shareholders in their suppliers, as seen with Alphabet's recent agreement with Marvell Technology. Qualcomm aims to grow its data center business to $15 billion annually by 2029. The urgency for Qualcomm’s AI pivot is driven partly by Apple shifting toward self-developed modem technology, which could reduce Qualcomm’s income from the iPhone supply chain. The Amazon deal provides a significant boost in credibility and financial backing as it transitions into new markets.
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Topics: AI data centers semiconductors strategic partnerships