Qualcomm's Amazon Deal Boosts Data Center Push with $5B 2027 Revenue Target
Qualcomm's data center strategy is gaining momentum with its landmark deal with Amazon. The agreement, which covers customized silicon and optical connectivity solutions, will see revenue start in the December quarter. Qualcomm expects to generate $5 billion in data center revenue by fiscal year 2027 with 'very high confidence,' and $15 billion by fiscal year 2029 as a longer-term goal.
The deal includes warrants tied to up to $60 billion in Amazon data center product purchases over 10 years, with about 15% of those warrants vesting upfront. Qualcomm's chief financial officer and chief operating officer, Akash Palkhiwala, called it a 'landmark' deal that marks the beginning of a broader push.
The company's strategy for the data center market rests on four technology pillars: custom silicon, AI accelerators, CPUs, and connectivity. Qualcomm is working with Amazon and another undisclosed hyperscaler to develop customized silicon, using its compute, connectivity, and manufacturing capabilities.