Qualcomm and Amazon Unveil Multi-Generational AI Chip Partnership
Qualcomm has announced a multi-generational partnership with Amazon to co-develop custom AI inference chips for large data centers, focusing on AI inference. The two companies will also work together on optical interconnect solutions supporting up to 1.6Tbps and pursue next-gen technologies.
The partnership includes three key areas: custom ASICs, high-speed optical interconnects, and software synergy. Qualcomm will supply tailored AI silicon to Amazon, while jointly developing optical interconnect products leveraging Qualcomm's SerDes and optical DSP technologies. The companies will also apply Amazon Bedrock EDA to Qualcomm's workloads to shorten chip design cycles.
As part of the agreement, Amazon received warrants over 25 million QCOM shares at a $161.26 strike price, implying approximately $4 billion in value, expiring on September 3, 2036. The company can opt for cashless exercise and vesting is tied to Amazon's purchases primarily linked to revenue from Qualcomm server chips and related technologies.
Qualcomm's data center strategy has four pillars: custom ASICs, standardized AI accelerators, server CPUs, and connectivity (optical DSP/SerDes). The company aims to capture the growing data center market with an end-to-end compute stack. With this partnership, Qualcomm's data center revenue is expected to grow from $5 billion in FY2027 to $15 billion in FY2029, a 73% CAGR.