Qualcomm and Amazon have struck a multi-generation agreement to develop customized silicon for AWS data centers, starting with chips designed for AI inference.
The companies will also work together on optical connections designed to handle the growing bandwidth needs of AWS data centers.
Amazon could also become a major customer in Qualcomm’s data center push. Part of the deal ties Amazon’s potential investment in Qualcomm to how much business the companies ultimately do together.
Why It Matters: AWS is adding another chipmaker to its AI infrastructure plans at a time when companies are putting more AI workloads into production. Qualcomm’s involvement could give Amazon more flexibility in how it builds those services and manages the cost of running them.
- A Deal That Could Reach $60 Billion: Amazon received warrants to acquire 25 million Qualcomm shares at $161.26 each, worth about $4 billion if fully exercised. Vesting happens in stages tied to commercial arrangements, including Amazon purchases of up to $60 billion in Qualcomm server chips and other technology. The warrants expire in September 2036.
- Inference Comes First: Customized silicon developed under the agreement will initially focus on AI inference, the computing required when deployed models process requests and generate outputs. More AI applications mean more of that work happens inside data centers, putting greater pressure on computing performance, energy use and operating costs.
- Faster Connections Are Part of the Plan: Moving growing amounts of data between processors creates another challenge for AI infrastructure. Qualcomm will bring its SerDes and optical DSP technology to connectivity solutions reaching up to 1.6 terabits per second, with additional generations planned as AWS data centers require more bandwidth.
- Data Centers Become a Bigger Qualcomm Business: Best known for smartphone processors, Qualcomm has set a goal of reaching $15 billion in data center sales in fiscal 2029. Its Dragonfly C1000 CPU, announced in June for data center and agentic AI workloads, already has Meta lined up as a customer when production begins in 2028. Other products on its roadmap include AI chips and technology for connecting multiple processors, taking Qualcomm further into a market led by NVIDIA in GPUs and Intel and AMD in CPUs.
- AWS Technology Goes Back Into Chip Design: Qualcomm plans to expand its use of AWS AI infrastructure, including Amazon Bedrock, for electronic design automation workloads. The goal is to shorten chip design cycles. Qualcomm will develop hardware for AWS while using Amazon’s AI infrastructure to help develop future semiconductor products.
