Qualcomm has issued Amazon warrants to acquire 25 million shares at $161.26 each — a roughly $4 billion stake — as part of a deal to build customized AI inference chips for AWS, marking a significant step in the chipmaker's push into data center markets dominated by Nvidia.
Qualcomm has struck a major data center partnership with Amazon Web Services, issuing warrants that allow Amazon to acquire 25 million shares of the chipmaker at $161.26 per share — a total investment of approximately $4 billion — as the San Diego-based company works to challenge Nvidia's dominance in AI infrastructure.
The agreement, disclosed in a filing with the Securities and Exchange Commission, centers on Qualcomm building "multiple generations of customized silicon" for AWS's AI infrastructure, with a specific focus on inference workloads.
Qualcomm shares rose 4% on Tuesday following the announcement, reflecting investor confidence in the company's bid to establish itself as a credible data center chipmaker.
The warrant issued to Amazon expires on Sept. 3, 2036, and the shares vest in tranches tied to the "execution of certain commercial arrangements," as well as Amazon's purchase of up to $60 billion worth of Qualcomm's server chips and related technology.
"As AI workloads grow exponentially — driving unprecedented demand for compute, storage, networking and memory bandwidth, and energy-efficient infrastructure — the collaboration brings together Amazon's comprehensive, secure, and price-performant AI infrastructure with Qualcomm Technologies' leadership in power-efficient processing, silicon design and system-level integration," the joint statement said.
Qualcomm has long been associated with processors for smartphones and mobile devices, but the company has been accelerating its data center ambitions. In June, it unveiled the Dragonfly C1000, a central processing unit designed for data centers with an emphasis on agentic AI and power efficiency. Meta is slated to begin using that chip when it enters production in 2028.
At the time of that announcement, Qualcomm said it was targeting $15 billion in data center sales by fiscal 2029, outlining a product roadmap that includes an AI chip and a multi-chip integration solution.
The AWS deal represents a second major hyperscaler endorsement for Qualcomm's data center strategy, coming alongside the earlier Meta arrangement. Amazon's annual capital expenditures on AI infrastructure are reaching into the hundreds of billions of dollars, underscoring the scale of the opportunity Qualcomm is pursuing.
The broader CPU market is attracting growing attention as AI workloads evolve. Bank of America predicts the CPU market could more than double, from $27 billion in 2025 to $60 billion by 2030. Intel and Advanced Micro Devices have both reported surging demand for their own data center CPUs, and Nvidia disclosed details about its agentic-optimized CPUs in March.
Dion Harris, Nvidia's head of AI infrastructure, told CNBC earlier this year that "CPUs are becoming the bottleneck in terms of growing out this AI and agentic workflow" — a dynamic that has opened a window for chipmakers including Qualcomm to compete for data center contracts previously dominated by GPU vendors.
Nvidia built its position as the world's most valuable company by dominating the graphics processing unit market, which powers the training and operation of large AI models. GPUs excel at running many simultaneous operations through thousands of small cores, while CPUs offer fewer but more powerful cores suited to sequential, general-purpose tasks — a distinction that increasingly matters as inference and agentic AI applications proliferate.
Whether Qualcomm can close the gap with Nvidia at meaningful scale will depend heavily on how quickly it can ramp production and win additional customers, with the AWS relationship now serving as its most concrete proof point to date.
Marc Sabatini is a staff writer at TechEchelon covering enterprise software, cybersecurity, and the regulatory beats that shape both. He focuses on the deal flow and policy decisions that move markets.
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