Qualcomm Teams with Amazon on $60 Billion AI Chip Alliance
Qualcomm and Amazon have formed a joint development alliance to create next-generation AI chips worth up to $60 billion. The agreement, signed on August 8th, will see Qualcomm handle chip design and power efficiency technologies accumulated from its mobile semiconductor expertise. Meanwhile, AWS will provide cloud-based AI infrastructure like 'Amazon Bedrock'.
As part of the deal, Amazon was granted warrants for up to 25 million shares of Qualcomm common stock, worth approximately $4 billion at a fixed price of $161.26 per share. These warrants are exercisable over the next 10 years.
The alliance is seen as a key element of Qualcomm's business diversification strategy, which aims to secure new growth engines by entering the AI infrastructure sector. The company has set a goal of achieving $15 billion in data center revenue by 2029 and is transitioning away from the smartphone market.