In a significant move to cement its position in the AI infrastructure market, Qualcomm has entered into a long-term partnership with Amazon. Under this agreement, Amazon has the potential to purchase up to $60 billion worth of AI data-center chips and related technologies. As part of the deal, Qualcomm is granting Amazon warrants valued at roughly $4 billion, which allows the cloud giant to acquire Qualcomm shares at a fixed price of $161.26 as they hit specific product purchase milestones. This strategic alliance sent Qualcomm’s shares up by more than 4%, signaling investor confidence in the company’s pivot away from its traditional reliance on the smartphone market.

This collaboration is a critical step for Qualcomm as it seeks to compete with Nvidia by providing cloud providers with custom AI chips and high-speed optical connectivity solutions. By working together on AI inference—the process of running trained AI models—the two companies aim to address the surging bandwidth demands of modern data centers. Furthermore, Qualcomm intends to leverage Amazon Web Services (AWS) to accelerate its own internal chip design cycles. With the backing of major players like Amazon, Microsoft, and Meta, Qualcomm is increasingly optimistic about its goal to reach $15 billion in data-center revenue by 2029, proving it has the technical breadth to become a major player in the evolving semiconductor landscape.