Amazon is making a major AI chip bet on Qualcomm

Amazon and Qualcomm are teaming up to develop multiple generations of custom silicon for AWS AI data centers, with a particular focus on AI inference.

The partnership also covers high-speed optical connectivity for Amazon’s data center networks, including technology designed to reach bandwidths of up to 1.6 terabits per second. Qualcomm says it will also use AWS infrastructure and Amazon Bedrock for parts of its own chip-development workflow.

The financial scale of the agreement is unusually large. Reuters reports that Amazon could purchase as much as $60 billion worth of Qualcomm AI chips and related products under the arrangement. Qualcomm has also granted Amazon warrants worth roughly $4 billion, tied to product purchases.

For Qualcomm, this is a significant shift.

The company is still best known for Snapdragon processors and smartphone connectivity, but it has been aggressively moving into PCs, edge AI and now large-scale data center infrastructure. Amazon joins Microsoft and Meta among the major customers Qualcomm is targeting as it tries to build a serious AI inference business.

Nvidia remains overwhelmingly dominant in AI accelerators, but hyperscalers increasingly want more suppliers, more custom silicon and tighter control over the cost of running AI models.

Qualcomm does not need to replace Nvidia for this deal to matter. Becoming one of the companies Amazon is willing to build several generations of AI infrastructure around would already move Qualcomm into a very different part of the semiconductor industry.