Qualcomm Seals $4 Billion Deal with Amazon for Custom AI Chips

Qualcomm has secured a major custom AI chip deal with Amazon that will see them build chips and high-speed optical links for AWS data centers. This partnership, worth an estimated $4 billion, marks Qualcomm's second significant win in the hyperscaler market after partnering with Meta Platforms earlier this year.

The deal focuses on AI inference workloads, allowing trained models to run quickly and efficiently. The companies will also build high-speed optical interconnects up to 1.6 terabits per second to reduce bandwidth bottlenecks within AWS data centers.

In return for the partnership, Amazon received a warrant to buy 25 million Qualcomm shares at $161.26, which could be worth approximately $4 billion. This deal positions Qualcomm as a key competitor in the data center market, challenging Nvidia's dominance.