Qualcomm and Amazon announced a partnership Tuesday that includes warrants allowing Amazon to acquire roughly $4 billion worth of Qualcomm stock, tying the investment to a broader effort to develop custom silicon for Amazon Web Services.
Qualcomm shares rose about 3% following the announcement as investors welcomed another major customer for the company’s expanding data center business. The agreement gives Qualcomm a second prominent hyperscaler partner after Meta.
The financial arrangement is significant, but it is not an immediate $4 billion cash investment. According to Qualcomm’s SEC filing, Amazon received warrants to purchase 25 million shares at $161.26 each.
The warrants expire on September 3, 2036, and vest in stages based on commercial milestones, including the execution of certain arrangements and purchases of up to $60 billion in Qualcomm server chips and other technology.
That structure gives Amazon an incentive to deepen its relationship with Qualcomm while offering the chipmaker a path toward substantial future revenue. The $60 billion figure represents the potential purchase amount tied to the warrant terms, not a guaranteed order or revenue already booked.
The technology collaboration will focus on customized silicon for AI inference, the process of running trained artificial intelligence models to generate output. Qualcomm and Amazon will also work on high-performance optical connectivity, including solutions extending up to 1.6 terabits per second and future generations.
These technologies are designed to move data efficiently across increasingly large AI data center networks. Qualcomm said it will deepen its use of AWS infrastructure, including Amazon Bedrock, for electronic design automation workloads aimed at shortening chip design cycles.
“As AI demand accelerates, data center infrastructure will require advances in both computing and connectivity to deliver greater performance with more efficiency,” Qualcomm CEO Cristiano Amon said in the announcement. AWS Vice President Prasad Kalyanaraman said the companies are working to deliver more efficient and cost-effective infrastructure for customers.
The partnership follows Qualcomm’s June introduction of its Dragonfly C1000 central processing unit, which Meta plans to use when production begins in 2028. Qualcomm designed the CPU for agentic AI workloads. The company has also outlined a broader data center roadmap that includes dedicated AI chips and products connecting multiple processors.
Qualcomm is targeting $15 billion in data center sales in fiscal 2029, according to CNBC. The AWS agreement provides another major customer relationship as the company seeks to establish itself in a market dominated by Nvidia and contested by Intel and Advanced Micro Devices.
Nvidia’s graphics processing units remain central to training sophisticated AI models and handling demanding parallel computations. CPUs, however, perform general-purpose tasks that coordinate systems and support increasingly complex AI agents. As those workloads expand, demand for CPUs is becoming a more important part of the AI investment cycle.
Bank of America estimates that the CPU market could grow from $27 billion in 2025 to $60 billion by 2030. Intel and AMD are already benefiting from rising data center demand, while Nvidia has introduced additional details about CPUs optimized for agentic AI. “CPUs are becoming the bottleneck in terms of growing out this AI and agentic workflow,” Dion Harris, Nvidia’s head of AI infrastructure, told CNBC in March.