Qualcomm and Amazon have entered a partnership to co-develop custom AI inference chips for AWS data centers. The agreement, which marks Qualcomm's first major collaboration with a Western hyperscaler, could generate up to $60 billion in commercial purchases over the next decade, ending in September 2036.
Production of the new chips is already underway, with revenue expected to begin in Qualcomm's fiscal Q1 2027. The hardware features high-speed optical connectivity reaching 1.6 terabits per second. Additionally, Qualcomm will utilize AWS AI infrastructure, including Amazon Bedrock, to enhance its electronic design automation workflows.
As part of the deal, Qualcomm issued warrants allowing Amazon to acquire up to 25 million shares of QCOM stock at a price of $161.26 per share. An initial tranche of 3.75 million shares has already vested. If fully exercised, the warrants would be valued at approximately $4 billion.
This partnership follows Qualcomm's June 2026 Investor Day, where the company introduced the Dragonfly C1000 CPU and set a target of $15 billion in data center sales by fiscal 2029. The company also previously acquired Alphawave Semi to secure high-speed connectivity technology.
