Amazon Will Purchase AI Chips from Qualcomm Worth Up to $60 Billion

Amazon has signed a long-term agreement with Qualcomm, giving the company the ability to purchase up to $60 billion worth of AI chips and other hardware. The companies will also jointly develop custom chips for Amazon's data centers.

Part of the agreement also involves Qualcomm stock. Amazon will receive the right to purchase approximately $4 billion worth of shares at a predetermined price. This right will vest in stages and will depend on how much product Amazon purchases from Qualcomm.

For years, Qualcomm was known primarily for chips designed for smartphones. The company is now expanding into the data center market, where Nvidia currently leads.

Qualcomm will develop custom chips for Amazon that will support the operation of already-trained AI models. The agreement also includes technology that will speed up data transfer within data centers.

Qualcomm's goal is to grow annual revenue from data center products to $15 billion by 2029.

Source: Reuters