Qualcomm Pivots to Data Centers with Amazon Custom-Silicon Deal

Qualcomm has announced a major deal with Amazon to manufacture custom data center chips. The agreement, which was revealed at the Goldman Sachs Communacopia + Technology 2026 conference, marks a significant shift in Qualcomm's business focus towards the AI data center market.

The deal consists of two parts: a commercial engagement where Qualcomm will provide multi-generational, multi-product manufacturing for Amazon, and the issuance of a stock warrant to Amazon. The warrant could bring Qualcomm up to $60 billion in revenue over time, with 3.75 million shares already vested on initial purchase commitments.

Qualcomm's CFO and COO Akash Palkhiwala described the deal as 'a landmark' for the company in the data center business, noting that it will start generating revenue from Amazon in December. Qualcomm is also working with Meta, which announced a similar partnership with the company in June.

Analyst Daniel Newman stated that this move signals the end of Qualcomm's focus on handsets and marks its entry into the AI data center market. He noted that the warrant ceiling alone runs four times the annual target set by Qualcomm for fiscal 2029, which was $15 billion.