Qualcomm strikes AI chip deal with Amazon, offers right to buy about $4 billion in stock
FILE PHOTO: An Amazon Web Services AI data center in New Carlisle, Indiana, U.S., October 3, 2025. REUTERS/Noah Berger for AWS//File Photo
Read a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
Sept 8 : Qualcomm on Tuesday reached a deal to develop custom chips with Amazon for AI data centers, giving it the right to acquire about $4 billion in shares in exchange for $60 billion in business with the chipmaker.
As part of the deal, Qualcomm has granted Amazon a warrant that could allow it to acquire up to $4 billion of its shares over the next decade. The warrant is tied to the companies’ striking business agreements over the period.
Shares of San Diego, California-based Qualcomm rose more than 7 per cent in early trading. The stock has slipped about 1 per cent this year, through last close, as a rebound in August only partly recouped steep losses sparked by weaker smartphone demand.
The warrant lets Amazon buy Qualcomm shares at a fixed price of $161.26 apiece, according to a regulatory filing.
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Such arrangements are becoming more common across the AI supply chain, raising questions among some investors about increasingly intertwined financial relationships as chipmakers offer equity incentives tied to future orders.
The agreement is the latest sign Qualcomm’s efforts to expand beyond its core smartphone business are gaining traction, as it faces the eventual loss of its modem business from Apple.
Qualcomm has spent the past year pitching custom chips and other data-center technology to cloud providers seeking alternatives to Nvidia’s dominant AI processors, with Amazon now joining a growing roster of customers that are backing its pivot.
The partnership comes weeks after Marvell Technology struck a similar custom AI chip deal with Alphabet’s Google, giving the tech giant the right to buy a stake worth up to $12.2 billion.
Under Tuesday’s deal, Qualcomm and Amazon will work together on chips for AI inference, a fast-growing market focused on running trained AI models that has become a key battleground among semiconductor firms.
The companies will also develop high-speed optical connectivity technologies, including solutions extending to 1.6 terabits per second, to support growing bandwidth demands in AI data centers.
As part of the tie-up, Qualcomm plans to expand its use of AWS services and infrastructure for chip design workloads, aiming to shorten development cycles.
In June, Qualcomm said it had signed on Microsoft and Meta as customers for its new data-center chips and expects revenue from two custom-chip hyperscale customers before the year-end. Data-center chip sales are expected to hit $15 billion by 2029.
Source: Reuters
Sign up for our newsletters
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST
Tap here to return to FAST
FAST
