Qualcomm and Amazon Team Up on Custom AI Chips for Data Centers
Qualcomm and Amazon have partnered to develop custom chips for AI data centers. The deal is worth up to $60 billion, with Qualcomm granting warrants worth about $4 billion that vest with product purchases.
The partnership highlights Qualcomm's efforts to diversify beyond smartphones, a move driven by rising component costs and weaker handset demand.
Qualcomm expects the custom AI chip business to drive data-center chip revenue to $15 billion by 2029. The company is courting cloud providers with custom AI chips and data-center technology as they seek alternatives to Nvidia's dominant processors.
The deal includes optical communications technology from Qualcomm, which will develop high-speed optical connectivity technologies to support growing bandwidth demands in AI data centers.