Qualcomm and Amazon have announced a long-term partnership covering customised artificial-intelligence chips and high-speed connectivity for Amazon’s data centres, with potential product purchases reaching $60 billion.
Qualcomm and Amazon have entered a long-term partnership to develop customised chips and connectivity technology for large-scale artificial-intelligence data centres.
The companies announced the agreement on Tuesday, September 8, positioning Qualcomm as an increasingly serious participant in the market for AI infrastructure traditionally dominated by Nvidia and other established data-centre chipmakers.
Under the arrangement, Qualcomm will work with Amazon across several generations of customised silicon designed to support Amazon Web Services’ expanding AI infrastructure. The companies will initially concentrate on chips used for AI inference—the process of running trained artificial-intelligence models to produce responses or predictions.
According to Qualcomm’s official announcement, the partnership will also cover advanced optical-connectivity systems capable of supporting data-transfer speeds of up to 1.6 terabits per second, alongside future generations of the technology.
High-speed optical connections have become increasingly important as operators build larger AI computing systems requiring vast quantities of data to move quickly between processors, storage equipment and networking infrastructure.
Reuters reported that Amazon could purchase as much as $60 billion in Qualcomm chips and related products under the agreement. The figure represents the potential scale of purchases rather than a guaranteed initial payment.
Qualcomm has also granted Amazon warrants that could allow the company to acquire up to 25 million Qualcomm shares at an exercise price of $161.26 per share. The shares would be worth approximately $4 billion at that price.
The warrants are tied to purchasing and financial milestones, meaning Amazon would earn the right to acquire the shares as qualifying conditions are met.
Qualcomm’s official public announcement concentrated on the technology partnership and did not include the $60 billion purchasing ceiling or full warrant terms. Those financial provisions were reported from the companies’ regulatory disclosures.
The agreement gives Amazon another partner as it expands the infrastructure supporting AWS and seeks more options for running AI applications. Amazon already develops its own Trainium and Inferentia processors while also providing customers with access to chips from external suppliers.
For Qualcomm, the partnership advances a strategy to diversify beyond smartphones. The company has been promoting its power-efficient processing technology for data centres, personal computers, vehicles and other markets as its exposure to the handset industry changes.
Qualcomm has set a target of generating $15 billion in annual data-centre chip revenue by 2029. Securing Amazon as a major customer could strengthen confidence in that objective, although actual revenue will depend on Amazon’s product orders and the partnership’s implementation.
The companies are also expanding their relationship in the opposite direction. Qualcomm said it would deepen its use of AWS infrastructure and Amazon Bedrock for electronic-design automation, with the aim of reducing the time required to develop new chips.
Qualcomm shares rose following the announcement, reflecting investor interest in the company’s attempt to gain a larger position in the rapidly expanding AI infrastructure market.
The partnership does not mean Amazon is abandoning its internally developed processors or its other chip suppliers. Instead, it broadens the range of customised computing and networking technologies available for the company’s growing data-centre operations.
