Qualcomm Partners with Amazon on Multi-Generation Custom Chips for AWS AI Data Centers

Qualcomm is partnering with Amazon.com to develop multiple generations of custom silicon to support AWS's expanding AI infrastructure.

Work targets AI inference at scale, aiming to improve performance per watt for large AI workloads. Partnership also covers optical connectivity for Amazon data center networks, including solutions up to 1.6T.

Qualcomm agreed to grant Amazon warrants to acquire up to 25 million Qualcomm shares.

Qualcomm rose over 9% in pre-market trading.

Adding momentum, supply chain sources indicate Intel is planning a further 10% price increase on PC CPUs starting in October. As Intel potentially retreats from lower-margin product lines, Qualcomm and other Arm-based chipmakers stand to capture incremental share in IPC, edge computing, and IoT markets. Qualcomm itself has already implemented a double-digit price hike across its chip portfolio effective September 1, aimed at passing through elevated supply chain costs and improving gross margins. CEO Cristiano Amon stated the company could no longer absorb supplier cost increases.

Fundamentally, Qualcomm's diversification continues to gain traction. Automotive revenue now accounts for approximately 14.2% of chip sales, up from 6.2% in fiscal 2023, while IoT revenue grew 9.0% year-over-year. The company also recently unveiled next-generation Adreno GPU architecture with dedicated AI cores and new Dragonwing processors targeting industrial edge AI.

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