Amazon Pumps Up Qualcomm Partnership with $60B AI Chip Deal

Qualcomm's stock rose over 5% on Tuesday after it was announced that Amazon has expanded its partnership with the chipmaker to develop customized silicon for AI data centers. The multi-generation collaboration is valued at up to $60 billion in payments to Qualcomm.

The companies will work together to develop chips for AI inference, which involves trained models generating responses, and optical connectivity capable of speeds of up to 1.6 terabits per second. This project leverages Qualcomm's SerDes and optical digital signal processor technologies to meet the rising bandwidth demands in AI data centers.

As part of this deal, Qualcomm issued an Amazon affiliate a warrant to acquire up to 25 million shares at an exercise price of $161.26, with a maximum value of around $4 billion. The shares will vest in tranches tied to the commercial relationship between the two companies, including agreements and actual purchases of Qualcomm's server-chip products.