Qualcomm, Amazon strike $4 billion custom chip deal

Sept 8 — Qualcomm said on Tuesday it had issued ​a warrant to Amazon, giving it the right to buy an about $4 billion stake, ‌as part of a collaboration to develop custom chips for ⁠AI data centers.

Shares ​of the San Diego, ⁠California-based chipmaker rose more than 7% in ‌early trading. The ‌stock has slipped about 1% this year, ⁠as a rebound ⁠in August only partly recouped steep losses sparked by weaker smartphone demand.

The warrant lets Amazon buy Qualcomm shares at $161.26 apiece and is linked to up to $60 billion of business ‌under the deal, according ​to a regulatory filing.

The companies will work together on chips for AI inference, a fast-growing market focused on running trained AI models that has become a key battleground among semiconductor firms.

Qualcomm and Amazon will also develop ​high-speed optical connectivity technologies, including solutions extending to ‌1.6 terabits ‌per ⁠second, to support growing bandwidth demands in AI data centers.

As part of the partnership, Qualcomm plans to expand its use of AWS artificial ‌intelligence services and infrastructure ​for chip design workloads, ‌aiming to shorten ⁠development ​cycles.

(Reporting by Anhata Rooprai in Bengaluru; Editing by Pooja ​Desai)

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