Qualcomm Signs Major Deal to Develop Custom AI Chips for Amazon

Qualcomm has signed a multi-generation data center infrastructure agreement with Amazon. Under the AI chip deal, Amazon has the right to acquire Qualcomm stock worth up to $4 billion. The shares will be allocated in tranches based on Amazon’s chip orders, which the agreement pegs at purchases worth up to $60 billion. 

What the Amazon Qualcomm Custom Silicon Deal Entails

Under the partnership, Qualcomm will work with Amazon to produce customized AI data center chips. Specifically, Qualcomm will supply AI inference chips to Amazon to support Amazon Web Services’ AI  infrastructure. 

“As AI workloads grow exponentially, driving unprecedented demand for compute, storage, networking and memory bandwidth, and energy-efficient infrastructure, the collaboration brings together Amazon’s comprehensive, secure, and price-performant AI infrastructure with Qualcomm Technologies’ leadership in power-efficient processing, silicon design and system-level integration,” Qualcomm said in a statement published on its website. 

The two companies will also collaborate on high-performance optical connectivity solutions to meet the growing bandwidth needs in data centers. The solutions will be based on Qualcomm’s advanced SerDes and optical DSP technologies.

“Qualcomm is pleased to work with AWS on customized silicon and connectivity solutions, bringing decades of leadership in advanced processing and power-efficient compute, to deliver breakthrough performance and enable the next generation of AI infrastructure,” Qualcomm President and CEO Cristiano Amon noted. 

Why the Partnership With Amazon Matters to Qualcomm

The AWS AI chip deal represents a significant step for the chipmaker as it works to establish itself as a supplier of data center processors. The chip deal will boost  confidence in Qualcomm’s Dragonfly C1000,  a central processing unit designed specifically for data centers. 

Qualcomm, which is a leading manufacturer of chips that power mobile devices like smartphones, launched Dragonfly C1000, in June. The new CPU is designed to support agentic AI and offer energy-efficient computing performance. 

“By working together on customized silicon and advanced connectivity, we’re delivering more performant, efficient, and cost-effective infrastructure for our customers,” AWS Vice President Prasad Kalyanaraman noted.

Meta is expected to use the CPU when production commences in 2028. Already, the social media giant has a multi-year agreement with AWS to deploy Amazon's Graviton CPU chips  for AI workloads.

Building a Data Center Business 

The latest deal is expected to help Qualcomm scale its data center business. In June, the company told investors it was aiming for $15 billion in data center sales by 2029 financial year. Its partnership with AWS enables it to demonstrate confidence from a second hyperscaler. Like Meta, Amazon plans to spend hundreds of billions of dollars each year on AI infrastructure.