Qualcomm Partners With Amazon on AI Chips

Qualcomm has reached a long-term partnership with Amazon under which Amazon could purchase as much as $60 billion in AI data-center chips and related products. As part of the deal, Qualcomm granted Amazon warrants valued at roughly $4 billion to buy Qualcomm shares at $161.26 each. The warrants will vest as Amazon purchases Qualcomm products.

The two companies plan to develop custom chips dedicated to AI inference and collaborate on high-speed optical connectivity for data centers. Qualcomm is aiming to generate $15 billion in annual data-center chip revenue by 2029 as it works to diversify beyond smartphones, where it faces weaker handset demand and the eventual loss of Apple's modem business.

Amazon joins Microsoft and Meta as major cloud customers collaborating with Qualcomm on custom silicon. The potential $60 billion in purchases is not guaranteed revenue, and exercising the warrants could dilute existing shareholders while Qualcomm competes against established suppliers such as Nvidia.