Qualcomm strikes AI chip deal with Amazon worth up to $60 billion

Sep 8, 2026

Qualcomm has secured a landmark multi-generational AI chip partnership with Amazon Web Services worth up to $60 billion through September 2036. Under the deal, the companies will co-develop custom AI inference silicon and 1.6T optical connectivity hardware. To cement the alliance, Qualcomm issued a warrant allowing Amazon to purchase up to 25 million shares for $4 billion, with vesting tied to commercial milestones. The deal bolsters Qualcomm's strategic pivot toward data centers as its Apple modem business phases out.

Qualcomm-Amazon AI chip partnership

▪Under the partnership, Qualcomm will expand its use of Amazon Web Services cloud infrastructure and tools, including Amazon Bedrock, to accelerate its internal chip design workflows.
▪Qualcomm and Amazon Web Services entered a multi-generational co-development agreement on September 8, 2026, to co-design custom AI inference silicon and develop 1.6 terabits per second optical connectivity hardware.

Qualcomm diversification beyond smartphones

▪Qualcomm is pursuing a data center diversification strategy to offset the planned phase-out of its modem business with Apple, which CEO Cristiano Amon expects will eliminate Qualcomm modems by 2027.
▪Qualcomm has set a target of $15 billion in data center sales for fiscal year 2029, building on previous announcements that Microsoft and Meta are customers for its data center chips.

Warrant structure for share purchase

▪Qualcomm issued a warrant to an Amazon affiliate to purchase up to 25 million shares of Qualcomm common stock at an exercise price of $161.26 per share, expiring on September 3, 2036.
▪The Amazon stock warrant vests in milestone-linked tranches, with 15% vesting immediately upon initial commitments and the remaining 85% vesting as Amazon spends up to $60 billion on Qualcomm products and services.

Financial terms of agreement

▪Qualcomm Chief Financial Officer Akash Palkhiwala stated that the Amazon partnership provides high confidence in meeting Qualcomm's $5 billion data center revenue target for fiscal year 2027.
▪Qualcomm Chief Financial Officer Akash Palkhiwala confirmed that revenue from the Amazon partnership will begin in Qualcomm's fiscal first quarter of 2027, which is the December 2026 quarter.

LPDDR memory architecture strategy

▪Qualcomm's AI inference chips utilize LPDDR memory rather than High Bandwidth Memory, with the Qualcomm AI200 supporting up to 768 gigabytes of LPDDR capacity per card to optimize sequential token generation workloads.
▪Qualcomm's next-generation AI250 card, expected in calendar year 2027, features a near-memory computing architecture that stacks compute logic adjacent to memory to reduce data travel distance.

Stock performance after announcement

▪Following the announcement on September 8, 2026, Qualcomm shares surged as much as 9.5% intraday to a high of $183.49 before closing up between 3% and 4%.
▪Amazon shares slipped approximately 1% on September 8, 2026, as investors evaluated the addition of Qualcomm as a new custom silicon supplier alongside Amazon's existing Trainium and Inferentia programs.