Qualcomm Lands $60 Billion AI Deal with Amazon

Qualcomm has landed a massive deal with Amazon to supply AI data center chips worth up to $60 billion. This partnership is part of Qualcomm's efforts to expand its non-handset business and capture a share of the growing data center market, which it believes has a total market opportunity of $1 trillion.

Under the terms of the agreement, Amazon will be able to purchase Qualcomm shares at $161.26 per share through warrants worth about $4 billion. The two companies will also collaborate on improving high-performance optical connectivity and reducing chip design cycles using Amazon Web Services and Amazon Bedrock infrastructure.

This deal is a significant step towards Qualcomm's goal of generating more than $15 billion in data center revenue by 2029, with a long-term target of capturing 5% of the total market. The company has been diversifying its portfolio beyond smartphones, which has seen declining sales due to Apple's plans to phase out Qualcomm's cellular modems.

Qualcomm CEO Cristiano Amon said that AI demand is accelerating and data center infrastructure needs advances in computing and connectivity to deliver greater performance with more efficiency. He added that the partnership with Amazon will bring decades of leadership in advanced processing and power-efficient compute to deliver breakthrough performance and enable the next generation of AI infrastructure.