Qualcomm Teams with Amazon on Next-Generation AI Chips
Qualcomm, the semiconductor designer, has formed a potentially lucrative partnership with Amazon to develop custom artificial intelligence (AI) chips. The two companies will work together to create high-performance, low-power AI chips for Amazon's cloud computing business, Amazon Web Services (AWS).
The deal also includes Qualcomm's advanced optical connectivity solutions to speed up data transfers across Amazon's sprawling data center network.
As part of the agreement, Amazon obtained a warrant to buy up to 25 million shares of Qualcomm's stock at an exercise price of $161.26 per share. The warrant vests in stages based on up to $60 billion in chip orders and related purchases, and it expires on September 3, 2036.
The partnership is seen as a strong vote of confidence for Qualcomm's AI chips, which are designed to power the growing demand for power-efficient computing infrastructure in the AI industry. The semiconductor designer has built expertise in energy-efficient processors over nearly two decades of developing high-performance, low-power chips for the smartphone market.