The partnership could generate up to $60 billion in chip payments for Qualcomm over the next decade|Will Buckner|CC BY 2.0
Qualcomm has secured a major deal with Amazon as it expands beyond smartphones and into the fast-growing AI data-center market.
Under the deal, Qualcomm will develop customized AI chips for Amazon Web Services. It also includes high-speed optical technology for data centers that could potentially transfer 1.6 terabits per second.
Amazon can also buy up to 25 million Qualcomm shares at $161.26 each, potentially investing up to $4 billion.
The partnership could generate up to $60 billion in chip payments for Qualcomm over the next decade. The company expects to begin recording revenue from Amazon in its fiscal first quarter, which ends in December.
Qualcomm shares jumped as much as 8.7% after the announcement. The partnership challenges Nvidia’s dominance in AI chips.
Amazon joins Microsoft and Meta in backing Qualcomm’s data-center push. The semiconductor company expects this business to reach $15 billion in annual revenue by 2029.