Qualcomm Soars on AI Data Center Deal with Amazon Web Services
Qualcomm shares surged on Tuesday after the chipmaker announced a major deal with Amazon Web Services (AWS). The company said it has entered a multi-generational product collaboration to supply customized silicon for large-scale AI data centers. This marks Qualcomm's third named hyperscaler partnership as it pushes into a market dominated by Nvidia.
The companies will work together on multiple generations of custom chips focused on AI inference, the process by which trained models generate outputs. They will also jointly develop optical connectivity solutions extending up to 1.6T, built on Qualcomm's SerDes and optical DSP technologies, to handle the bandwidth demands of AWS's data center networks.
The deal includes a warrant for Amazon to purchase up to 25 million QCOM shares at $161.26 each, according to Qualcomm's regulatory filing. This is in addition to an initial tranche of 3.75 million shares, with the remainder tied to commercial milestones that could total up to $60 billion in business under the deal.
Qualcomm also plans to deepen its own use of AWS infrastructure, including Amazon Bedrock, for electronic design automation work, aiming to shorten its chip design cycles. Qualcomm CEO Cristiano Amon said, 'As AI demand accelerates, data center infrastructure will require advances in both computing and connectivity to deliver greater performance with more efficiency.'
This agreement follows Qualcomm's June 2026 Investor Day, where the company laid out its AI data center strategy in detail. The Amazon deal marks Qualcomm's third named hyperscaler relationship after partnerships with Meta and Microsoft.
AWS already builds its own custom silicon, including the Trainium and Graviton lines, and CEO Andy Jassy said that annualized revenue across Amazon's chip products was already around $20 billion, with a path toward $50 billion if AWS begins selling to outside customers.