Qualcomm Wins $4B AWS Chip Deal

Qualcomm issued Amazon warrants for 25 million shares worth $4 billion as part of a multi-generation custom silicon partnership to power AWS's AI inference infrastructure, with vesting tied to up to $60 billion in future chip purchases. The deal marks Qualcomm's most significant push yet into data center CPUs, positioning it as a challenger to Nvidia in the fast-growing AI infrastructure market.

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Qualcomm shares jumped as much as 10% on confirmation that a major hyperscaler is backing its entry into data center silicon, validating its $15 billion fiscal 2029 data center revenue target. The warrant structure aligns Amazon's incentives with Qualcomm's execution, creating a long-dated (2036) equity link between the two companies contingent on actual chip purchases up to $60 billion. This follows Qualcomm's June announcement of the Dragonfly C1000 CPU and a Meta deal, suggesting Qualcomm is assembling a multi-hyperscaler customer base for AI-optimized CPUs. The move intensifies competition in the data center CPU market, which Bank of America expects to more than double from $27 billion to $60 billion by 2030, pressuring Intel, AMD and Nvidia's CPU ambitions. Longer term, it reinforces the broader hyperscaler trend toward customized, power-efficient silicon for inference workloads as AI capex continues to scale into the hundreds of billions annually.