Qualcomm's AI Data Centre Push Gets Boost from Amazon Deal
Qualcomm's expansion into AI data centres has received a boost from its recent partnership with Amazon. The chipmaker is targeting over $15 billion in data centre revenue by FY2029, with its current business generating around $5 billion in revenue for the fiscal year 2027.
The agreement between Qualcomm and Amazon includes a multi-generational collaboration focused on AI data centre infrastructure. Amazon Web Services will use Qualcomm's customised AI chips for inference workloads, while the chipmaker will provide high-speed optical connectivity solutions for data centres.
As part of the deal, Qualcomm granted Amazon warrants to acquire up to 25 million shares, representing a potential value of around $4 billion. The exercise price of these warrants is $161.26 per share, and their vesting is linked to commercial milestones and Amazon's purchases of Qualcomm products and services.
Qualcomm's data centre business has emerged as an important new growth driver for the company, which is looking beyond its traditional smartphone business for revenue. The chipmaker's handset revenue fell 20% year-on-year in fiscal Q3, according to GuruFocus.