Qualcomm And Amazon Partner On AI Chips For Next-Generation Data Centers

Add to Bookmarks Play Sound The collaboration aims to address the rapidly increasing demand for compute, storage, networking, memory bandwidth, and energy-efficient infrastructure. Image by Samuel Boivin / Shutterstock Qualcomm Technologies has announced a multi-generational collaboration with Amazon to develop customized chips for artificial intelligence (AI) inference and high-speed optical connectivity for next-generation data centers, according to a company statement released on Tuesday. Partnership details The agreement gives Amazon a warrant to acquire up to 25 million Qualcomm shares at a fixed exercise price of $161.26 per share, worth roughly $4 billion if fully exercised, according to a US Securities and Exchange Commission (SEC) filing. The warrant's vesting is tied to commercial milestones and up to $60 billion in payments for Qualcomm's server chip products, technology, systems and manufacturing services. Under the expanded collaboration, Qualcomm Technologies and Amazon Web Services (AWS) will work across multiple generations of customized silicon for large-scale AI data centers, initially focusing on AI inference. 'As AI demand accelerates, data center infrastructure will require advances in both computing and connectivity to deliver greater performance with more efficiency,' said Cristiano Amon, president and CEO of Qualcomm Incorporated, in a statement. The companies will also develop optical connectivity solutions using Qualcomm's SerDes and optical DSP technologies, with speeds of up to 1.6 terabits per second to address the growing bandwidth demands of AI infrastructure. As part of the expanded relationship, Qualcomm plans to deepen its use of AWS AI infrastructure, including Amazon Bedrock, for electronic design automation workloads, with the aim of shortening chip design cycles. Share price Qualcomm's shares were up 4.8% Tuesday to $176.83, around 6:26 p.m. AST Arabia. Expanding AI infrastructure market The agreement marks another step in Qualcomm's effort to expand beyond its traditional business and accelerates its push into AI infrastructure. It is a key win for the company as it spent the past year pitching custom silicon to cloud providers seeking alternatives to Nvidia's AI processors, according to a Reuters report. Amazon now joins several tech giants backing the chipmaker's strategic pivot into data centers. Earlier this summer, Qualcomm confirmed that it had secured Microsoft and Meta as customers for its data center processors, with revenue from two hyperscale partners expected to begin materializing before the end of the year. Big number Qualcomm expects data center chip revenue to hit $15 billion by 2029.