Qualcomm Teams with Amazon for Custom AI Chip Partnership
Qualcomm and Amazon have formed a long-term partnership to supply AI data-center chips. Under this deal, Amazon has the right to buy up to $60 billion of Qualcomm's AI data-center chips and related products. This collaboration highlights the growing demand for custom AI chips in the market.
The deal includes warrants worth about $4 billion that vest with product purchases. These warrants allow Amazon to buy shares of Qualcomm at a fixed price of $161.26 per share. The agreement is seen as a vote of confidence for Qualcomm's efforts to diversify beyond smartphones and become a major supplier of AI infrastructure.
Qualcomm expects the data-center chip revenue to reach $15 billion by 2029. Bob O'Donnell, chief analyst at TECHnalysis Research, said that this deal is 'exactly the kind of development that Qualcomm needed to reassure the market that their lofty data-center ambitions could indeed be met.'
The partnership between Qualcomm and Amazon will focus on developing chips for AI inference, a fast-growing market. Additionally, they will work together on high-speed optical connectivity technologies, including solutions extending to 1.6 terabits per second.