Qualcomm announced a strategic, multi-generational collaboration with Amazon to co-develop custom artificial intelligence inference silicon and advanced optical connectivity technologies for hyperscale data centers. According to Reuters, the agreement features a warrant structure allowing Amazon to purchase approximately $4 billion of Qualcomm stock.
Qualcomm and Amazon Ink Multi-Generation AI Chip Partnership
Under the terms of the transaction, Qualcomm issued Amazon an equity warrant to buy up to 25 million shares of common stock at a strike price of $161.26 per share over the next decade, as noted by HotHardware. The performance-based arrangement ties share vesting directly to hardware procurement, with an initial 3.75 million shares unlocking immediately based on starting purchase commitments. To unlock the full 25-million-share allocation, Amazon could spend up to $60 billion on Qualcomm server chips, networking equipment, and manufacturing services through 2036.
Following the announcement, Qualcomm shares climbed, rising about 3% initially according to CNBC, while other reports tracked intraday jumps of up to 9.5% to reach a two-month high.
Focus on AI Inference and 1.6T Optical Networking
The partnership centers on co-designing custom neural processing accelerators built specifically for high performance and efficiency in AI inference workloads, addressing energy demands in large-scale cloud environments. In addition to computing silicon, the two tech giants are collaborating on high-speed optical communications technology.
Leveraging Qualcomm’s SerDes and optical digital signal processing technologies, the companies will develop optical interconnect solutions extending up to 1.6 terabits per second. According to Yahoo Finance, these components are designed to support surging bandwidth demands inside Amazon Web Services networks.
“As AI workloads grow exponentially—driving unprecedented demand for compute, storage, networking and memory bandwidth, and energy-efficient infrastructure—the collaboration brings together Amazon’s comprehensive, secure, and price-performant AI infrastructure with Qualcomm Technologies’ leadership in power-efficient processing, silicon design and system-level integration,” Qualcomm said in a statement cited by Econotimes. Qualcomm CEO Cristiano Amon and AWS Vice President Prasad Kalyanaraman both emphasized the deepened alignment in advancing data center infrastructure.
Expanding Beyond Smartphones Into Data Center Infrastructure
The deal marks Qualcomm’s largest expansion into cloud data center infrastructure to date, bolstering the chipmaker’s diversification efforts. Best known for powering mobile devices and smartphones, Qualcomm faces the eventual loss of its Apple modem business alongside rising component costs and weaker handset demand.
To offset these pressures, Qualcomm has spent the past year courting major cloud providers seeking alternatives to Nvidia’s dominant processors. Amazon joins Meta and Microsoft in backing Qualcomm’s data center push. The company has previously unveiled its Dragonfly C1000 data center CPU—slated for production with Meta in 2028—and maintains a broader roadmap targeting $15 billion in data center sales by fiscal 2029.
As part of the reciprocal tie-up, Qualcomm also plans to expand its internal reliance on AWS cloud infrastructure. The chipmaker will utilize Amazon Bedrock and related services for electronic design automation workloads, aiming to streamline development and shorten future chip design cycles.