Qualcomm Lands Amazon AI Chip Deal — and Hands Over a $4 Billion Stock Warrant

Amazon may buy up to $60 billion of Qualcomm AI data-center silicon under a multi-generation deal that also covers optical interconnect up to 1.6 Tbps. The attached warrant lets Amazon acquire roughly 25 million Qualcomm shares at $161.26. It follows Marvell's Google deal and marks Qualcomm's return to the data-center market.

Key Takeaways

Amazon may buy up to $60 billion of Qualcomm AI data-center silicon under a multi-generation deal that also covers optical interconnect up to 1.6 Tbps.
The attached warrant lets Amazon acquire roughly 25 million Qualcomm shares at $161.26.
It follows Marvell's Google deal and marks Qualcomm's return to the data-center market.

AI synthesis5 sources9

Qualcomm and Amazon announced a multi-generation collaboration on custom silicon for AI data centers, under which Amazon may purchase up to $60 billion of Qualcomm processors and related products. The deal, disclosed on September 8, also hands Amazon a warrant covering roughly 25 million Qualcomm shares at $161.26 each — about $4 billion in stock — that vests as product purchases accumulate, according to a regulatory filing.

The technical scope runs past compute. Qualcomm and Amazon will co-develop custom chips for AI inference, the fast-growing market for running already-trained models, and optical interconnect technology supporting links up to 1.6 terabits per second for the bandwidth-hungry fabric inside AI data centers. Optical is a relatively new field for Qualcomm: it arrived largely through its $2.4 billion acquisition of AlphaWave, whose founder Tony Pialis now heads Qualcomm's data-center chip business.

The commercial logic is diversification. Qualcomm has spent a year courting cloud providers as they look for alternatives to Nvidia, and the deal adds Amazon to a customer roster that already includes Microsoft and Meta. Qualcomm has told investors it expects data-center chip revenue to reach $15 billion by 2029, offsetting the eventual loss of its Apple modem business, softer handset demand and rising component costs. As part of the tie-up the company will expand its own use of AWS infrastructure for chip-design workloads, aiming to shorten development cycles. Qualcomm shares rose more than 3% on the news.

Amazon's side is equally telling. Its custom chip business has become a growth driver for AWS, with an annualised revenue run-rate above $25 billion at the end of the June quarter — a business that lets the cloud unit capture margin Nvidia would otherwise take. The structure echoes Marvell's recent custom-silicon agreement with Alphabet's Google, which included a warrant worth up to $12.2 billion — a pattern of equity-linked supply deals that analysts increasingly describe as financing woven into the AI build-out.

Neither company disclosed which chips are first, what volumes are committed, or how much of the $60 billion figure is a firm order rather than a stated ceiling.