Qualcomm shares climbed 4% Tuesday after the chipmaker unveiled a data center infrastructure partnership with Amazon Web Services. The deal marks a significant win for the company as it looks to carve out a bigger role in the competitive artificial intelligence market, where Nvidia currently holds the crown.
In a filing with the Securities and Exchange Commission, Qualcomm said it issued Amazon warrants to acquire 25 million shares at $161.26 apiece, worth a total of $4 billion. The investment is tied to future collaboration on custom silicon, with the two companies working together “across multiple generations of customized silicon” to support AWS‘s AI infrastructure, specifically focusing on inference.
“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 companies said in a joint press release.
Qualcomm has long been known as a smartphone chipmaker, but it grabbed attention in June when it revealed a data center CPU called Dragonfly C1000, built for agentic AI, and announced that Meta would use the processor when production starts in 2028. The company has targeted $15 billion in data center sales for fiscal 2029, with a roadmap that includes an AI chip and a product that ties multiple chips together.
Teaming up with Amazon gives Qualcomm an endorsement from another hyperscaler. Amazon’s annual capital expenditures on AI infrastructure, like Meta’s, now reach into the hundreds of billions of dollars. The warrants Qualcomm issued expire on Sept. 3, 2036, and vest in tranches tied to the execution of specific commercial arrangements, including the purchase of up to $60 billion worth of Qualcomm server chips and other technology.
The move comes as Nvidia has become the world’s most valuable company by dominating the market for GPUs, the chips essential for building and running advanced AI models. But the CPU is gaining prominence as part of AI workloads. GPUs excel at training models due to their many small cores performing operations simultaneously, while CPUs use fewer powerful cores for sequential, general-purpose tasks.
Bank of America predicts the CPU market will more than double, from $27 billion in 2025 to $60 billion by 2030. Intel and Advanced Micro Devices are seeing surging demand for data center CPUs, and Nvidia itself offered new details in March about its agentic-optimized CPUs. Dion Harris, Nvidia’s head of AI infrastructure, told CNBC at the time, “CPUs are becoming the bottleneck in terms of growing out this AI and agentic workflow.”
