Qualcomm said on Tuesday it gave Amazon the right to acquire about $4 billion in shares under a deal to develop custom chips for artificial intelligence (AI) data centers. The warrant lets Amazon buy Qualcomm shares at a fixed price of $161.26 apiece, according to a regulatory filing. The company said the shares vest in tranches tied to the “execution of certain commercial arrangements,” as well as the purchase of up to $60 billion worth of Qualcomm’s server chips and other technology. Under Tuesday's deal, Qualcomm and Amazon will work on chips for AI inference, a fast-growing market focused on running trained AI models that has become a key battleground among semiconductor firms. Beyond computing chips, the deal includes optical communications technology from Qualcomm. The companies will develop high-speed optical connectivity technologies, including solutions extending to 1.6 terabits per second, to support growing bandwidth demands in AI data centers. As part of the tie-up, Qualcomm plans to expand its use of AWS services and infrastructure for chip design workloads, aiming to shorten development cycles. Shares of San Diego, California-based Qualcomm rose more than 7% in early trading on Tuesday. The stock has slipped about 1% this year, through last close, as a rebound in August only partly recouped steep losses sparked by weaker smartphone demand. The agreement is the latest sign of Qualcomm's efforts to diversify beyond smartphones gaining traction as it faces the eventual loss of its Apple modem business, rising component costs and weaker handset demand. Qualcomm has spent the past year courting cloud providers with custom AI chips and data-center technology as they seek alternatives to Nvidia's dominant processors.
