Qualcomm Partners with Amazon for Custom AI Chips
Qualcomm has entered a long-term partnership with Amazon under which the tech giant could purchase up to $60 billion in Qualcomm's AI data-center chips and related products. The deal includes warrants worth approximately $4 billion, allowing Amazon to buy Qualcomm shares at $161.26 per share as it purchases more of its technology. Together, they will develop custom AI inference chips and high-speed optical connectivity solutions for data centers. This partnership is a strategic move for Qualcomm as it seeks to expand beyond smartphones into the growing AI infrastructure market. The deal adds Amazon—joining Microsoft and Meta—as another major cloud customer working with Qualcomm on silicon development. For AWS, this collaboration could enhance its ability to offer diverse and cost-efficient AI hardware options while reducing dependency on single suppliers. However, both companies face risks: Qualcomm must successfully develop competitive chips in a market dominated by rivals like Nvidia, and Amazon is granting equity upside through the warrants. The deal also raises execution concerns for Qualcomm as it aims to reach $15 billion annually from data-center chip sales by 2029.
Topics: AI corporate partnerships data centers semiconductors