Qualcomm, Amazon team up on custom AI data center chips

Qualcomm ↗ 1.20% announced a multi-generational collaboration with Amazon Amazon.com, Inc. ↗ 1.48% on Tuesday to develop customized silicon and high-speed optical connectivity solutions for large-scale AI data centers, marking a major expansion of the chipmaker's push beyond its smartphone roots and into a market long dominated by Nvidia ↘ 5.47%.

Shares of the San Diego-based chipmaker rose roughly 10% in premarket trading following the announcement. As part of the deal, Qualcomm will issue warrants to Amazon for up to 25 million shares of common stock, cementing the long-term nature of the partnership.kfgo+2

Custom Chips for AI Inference

The collaboration centers on multiple generations of custom AI inference chips designed for Amazon Web Services data centers, along with optical connectivity solutions extending up to 1.6 terabits per second. The partnership pairs Qualcomm's expertise in power-efficient processing and silicon design with AWS's cloud infrastructure at scale.prnewswire

"As AI demand accelerates, data center infrastructure will require advances in both computing and connectivity to deliver greater performance with more efficiency," said Cristiano Amon, president and CEO of Qualcomm, in a press release. Prasad Kalyanaraman, vice president at AWS, said the collaboration "builds on a strong foundation of partnership and reflects our shared commitment to pushing the boundaries of what's possible".prnewswire

Qualcomm will also deepen its own use of AWS AI infrastructure, including Amazon Bedrock, for electronic design automation workloads aimed at shortening chip design cycles.prnewswire

A Broader Diversification Play

The Amazon deal is the latest step in Qualcomm's effort to diversify beyond mobile processors and into the data center market. The company revealed at its June 2026 Investor Day a separate multi-generational CPU agreement with Meta Platforms ↗ 0.00% for the Dragonfly C1000 project, with production expected in the second half of 2028. Qualcomm has set a target of more than $15 billion in data center revenue by fiscal 2029.cryptobriefing

The partnership also comes as AWS continues to develop its own custom chips, including the Graviton series for general computing and the Trainium and Inferentia lines for machine learning. Qualcomm's stock had slipped about 1% this year heading into Tuesday's announcement, weighed down by weaker smartphone demand.kfgo+1