Qualcomm lands Amazon as a data centre chip customer, and investor

Qualcomm, best known for the chips inside Android phones, has signed Amazon as a customer for custom data centre silicon, a significant step in its push to become a serious supplier for AI infrastructure.

The deal

Announced on 8 September, the multi-generation collaboration covers:

• customised chips for AI inference, the work of running trained models to answer requests, and
• optical links with speeds of up to 1.6 terabits per second, for moving data between chips and servers.

Qualcomm said it is already in production with Amazon and expects revenue from the relationship to start in the December 2026 quarter.

Amazon becomes a shareholder

As part of the agreement, Amazon received warrants to buy 25 million Qualcomm shares at $161.26 each, about $4 billion in total, according to CNBC.

The warrants are tied to up to $60 billion in potential commercial transactions. That headline number needs care: it represents the maximum payments connected to the warrants vesting, not booked revenue or committed orders. Warrant deals like this reward a customer with equity as it buys more, aligning both companies’ incentives.

Why it matters

The market for AI chips is dominated by Nvidia. The biggest cloud providers are trying to reduce their dependence on it by designing custom chips, often with partners, especially for inference, which is becoming the larger share of AI computing as more people use AI products every day.

For Qualcomm, whose core smartphone market has matured, winning a hyperscale customer like Amazon Web Services is a validation of its data centre ambitions, built on its long experience with power-efficient chip design. Power efficiency is a selling point that matters more every month as AI’s electricity demands climb.