Amazon Deal Gives Qualcomm Big Boost in Data Center Push

Qualcomm and Amazon have announced a multi-generational deal to build custom AI chips and optical networking for AWS data centers.

The partnership covers custom silicon built for AI inference, spanning multiple chip generations. It also includes optical connectivity reaching up to 1.6 terabits per second, using technology Qualcomm gained through its $2.4 billion acquisition of Alphawave Semi in December 2025.

Qualcomm will issue Amazon a warrant to buy up to 25 million QCOM shares at $161.26 each, worth roughly $4 billion. Of that, 3.75 million shares vest immediately, and the warrant expires in 2036. This stake is significant, with Amazon potentially spending up to $60 billion on Qualcomm products and services over 10 years for the full warrant to vest.

The deal gives Qualcomm a foothold as it races to reduce its reliance on smartphones, particularly Apple's modem supply contract, which expires in March 2027. The company has set a target of more than $15 billion in data center revenue by fiscal 2029, up from roughly $5 billion projected for fiscal 2027.