Qualcomm and Amazon Partner to Co-Develop Custom AI Chips and Optical Networking in 4 Billion Dollar Deal
Qualcomm and Amazon Web Services announced a multi-generational partnership on September 8 to co-design custom AI inference chips and high-speed optical networking technology. The deal includes stock warrants potentially worth 4 billion dollars tied to Amazon's hardware purchasing commitments through 2036.
Qualcomm and Amazon Web Services announced a multi-generational strategic partnership on September 8 to co-develop custom artificial intelligence inference chips and high-speed optical networking technology for AI data centers.
The collaboration focuses on two technical areas. First, the companies are co-designing specialized neural processing accelerators optimized for high-performance, energy-efficient AI inference workloads. Second, they are developing optical interconnects capable of speeds up to 1.6 terabits per second to handle the bandwidth demands within AI server clusters.
The deal includes a financial arrangement where Qualcomm issued stock warrants to Amazon. The warrants give Amazon the right to acquire up to 25 million shares of Qualcomm common stock at 161.26 dollars per share, with a total potential value of approximately 4 billion dollars. The shares vest in tranches tied to Amazon's hardware purchasing commitments, which could reach up to 60 billion dollars in total spend on Qualcomm chips, networking gear, and manufacturing services through 2036.
Beyond hardware development, the partnership integrates AWS infrastructure into Qualcomm's internal operations. Qualcomm will expand its use of AWS to run chip design and testing applications, using Amazon Bedrock and other managed AI services.
For Qualcomm, the deal is a significant step in its strategy to diversify revenue beyond the smartphone market. The company has set a target of reaching 15 billion dollars in data-center chip revenue by fiscal 2029.
For Amazon, the collaboration strengthens its existing custom silicon portfolio and data center networking capabilities. AWS already develops its own custom chips, including the Trainium and Inferentia series, and the Qualcomm partnership adds another dimension to its hardware strategy.
The announcement came on the same day as several other major AI industry developments, including Mistral AI's record European funding round and a joint advisory from U.S. intelligence agencies about Chinese AI firms.
