Qualcomm has entered into a long-term partnership with Amazon that could see the cloud giant purchase up to $60 billion worth of Qualcomm’s AI data-center chips and related products. The agreement represents a significant step in Qualcomm’s effort to expand beyond its traditional smartphone business and establish a stronger position in the rapidly growing artificial intelligence infrastructure market.
Under the arrangement announced on September 8, 2026, Amazon will have the opportunity to purchase Qualcomm shares through warrants valued at about $4 billion. The warrants will vest as Amazon makes qualifying product purchases and allow the company to acquire Qualcomm stock at $161.26 per share, according to a regulatory filing.
Qualcomm shares gained more than 3% following news of the agreement.
The partnership is particularly important for Qualcomm as the company works to reduce its reliance on smartphones. Qualcomm is facing the eventual loss of revenue from its modem business with Apple, while higher component costs and softer handset demand are adding pressure to its traditional operations.
In response, Qualcomm has spent the past year targeting cloud providers with custom-designed artificial intelligence chips and other data-center technologies. The company is attempting to establish itself as an alternative supplier as cloud operators look for additional options beyond Nvidia’s dominant AI processors.
Amazon now joins Microsoft and Meta as major customers supporting Qualcomm’s expansion into data-center technology. Qualcomm expects its data-center chip business to generate $15 billion in revenue by 2029.
Bob O’Donnell, chief analyst at TECHnalysis Research, said the Amazon agreement provides an important signal that Qualcomm’s ambitions in the data-center market could be achievable. He described the deal as the type of development that could reassure investors about the company’s ability to meet its previously announced targets.
The agreement focuses heavily on custom chips designed for AI inference. Inference refers to the process of using already-trained artificial intelligence models to generate results, and demand for infrastructure capable of handling inference workloads is expanding rapidly. The area has become an increasingly important competitive market for semiconductor companies.
Amazon has also been building its own custom-chip business for its cloud division, Amazon Web Services. That operation had reached an annualized revenue run-rate of more than $25 billion by the end of the June quarter, highlighting the growing importance of customized computing hardware to the cloud provider.
The Qualcomm-Amazon relationship extends beyond processing chips. The companies will also work together on optical connectivity technology intended for AI data centers. Their plans include high-speed solutions capable of supporting connectivity of up to 1.6 terabits per second.
The optical technology is aimed at addressing the increasing bandwidth requirements of AI data centers, where large numbers of computing systems must communicate quickly as artificial intelligence workloads become more demanding.
The agreement also represents a vote of confidence in a relatively new area of Qualcomm’s business. The company entered the data-center chip market more aggressively following its $2.4 billion acquisition of AlphaWave last year. Tony Pialis, AlphaWave’s CEO, subsequently became Qualcomm’s chief executive overseeing data-center chips.
O’Donnell said the combination of computing technology and optical interconnect capabilities demonstrates the breadth of semiconductor expertise Qualcomm can bring to AI infrastructure.
As part of the broader partnership, Qualcomm also plans to increase its use of Amazon Web Services infrastructure and services for chip-design workloads. The company expects that greater use of AWS resources will help shorten the time required to develop new chips.
The deal comes only weeks after Marvell Technology announced a comparable agreement with Alphabet’s Google. That arrangement gave Google the right to acquire a stake worth as much as $12.2 billion through a stock warrant linked to a custom AI chip partnership.
For Qualcomm, the agreement with Amazon provides an important opportunity to expand its presence in AI infrastructure while developing new revenue streams outside smartphones. For Amazon, the partnership adds another semiconductor supplier as demand for specialized computing and high-speed connectivity continues to grow across AI data centers.
