Qualcomm Lands $4 Billion Amazon Chip Deal Amid AI Boom
Qualcomm has secured a major partnership with Amazon worth up to $4 billion in custom chip deals. The agreement will see Amazon purchase up to $60 billion of Qualcomm's AI data-center chips and related products over time, bolstering the chipmaker's efforts to become a leading supplier of AI infrastructure.
The deal highlights the growing importance of AI in the tech industry, with cloud giants like Amazon seeking custom-made chips to power their operations. As part of the agreement, Qualcomm will grant Amazon warrants worth about $4 billion that vest with product purchases, allowing the cloud giant to buy shares at a fixed price of $161.26.
Qualcomm's shares rose over 3% following the announcement, as investors welcomed the news of the partnership. The deal is seen as a vote of confidence in Qualcomm's efforts to diversify beyond its traditional smartphone business and tap into the growing market for AI chips.