Qualcomm signs deal to supply Amazon with custom AI chips
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Qualcomm Inc. signed Amazon.com Inc. as a data center chip customer in a multi-generational deal announced Tuesday. The agreement gives Amazon the right to acquire up to $4 billion in Qualcomm shares. Qualcomm shares jumped 9.7% in premarket trading.
Key Facts
- Qualcomm issued Amazon a warrant to acquire up to 25 million shares at $161.26 per share.
- The warrant shares vest in tranches tied to Amazon chip orders up to a value of $60 billion.
- Qualcomm and Amazon are also partnering on high-performance optical connectivity solutions.
- Qualcomm will use Amazon's AI servers to accelerate its chip design process.
Deal Structure
Qualcomm announced the collaboration with Amazon Web Services on Tuesday. The agreement spans multiple generations of custom silicon for AWS AI infrastructure. Amazon received a warrant for 25 million Qualcomm shares at an exercise price of $161.26. The warrant vests in tranches as Amazon places chip orders up to $60 billion.
Market Reaction
Qualcomm shares rose 9.7% in premarket trading in New York. The partnership may intensify competition with Nvidia in AI data center chips.
Technology Collaboration
The companies are jointly developing high-performance optical connectivity solutions. Qualcomm will leverage Amazon's AI servers to speed up its chip design workflow.
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