Qualcomm Challenges Nvidia with Bold Amazon Partnership

Qualcomm's bold move to challenge Nvidia in AI data centers has sent its shares soaring over 10% after announcing a partnership with Amazon Web Services.

The deal involves Qualcomm developing custom chips for AI data center infrastructure, focusing on inference workloads, which are the computations AI models run when generating responses. The partnership combines Amazon's AI infrastructure with Qualcomm's power-efficient processing and silicon design capabilities.

Qualcomm also issued Amazon a warrant to purchase up to 25 million shares of Qualcomm stock, giving Amazon a direct stake in the success of the partnership.

This move marks a significant step for Qualcomm as it transitions from smartphones to data centers. The company aims to reach $15 billion in data center revenue by fiscal 2029 and has already secured Meta as another major anchor customer with production expected to begin in 2028.