Qualcomm and Amazon have entered into a long-term agreement to develop custom chips for Amazon Web Services (AWS), a deal that could be worth up to $60 billion depending on future orders. While the exact financial terms have not been officially disclosed, reports indicate that Amazon has not yet placed an order for that full amount. As part of the agreement, Qualcomm issued an Amazon affiliate a warrant to acquire up to 25 million Qualcomm shares at an exercise price of $161.26 per share. The warrant expires on September 3, 2036, and can be exercised without cash.
The partnership will focus on chips designed for large-scale AI systems and high-speed optical connections. This move marks a strategic shift for Qualcomm, which is looking to reduce its reliance on the smartphone chip market. In the June 2026 quarter, Qualcomm’s handset revenue fell 19.6% year over year. The company aims for its data center business to exceed $15 billion in revenue by fiscal 2029. Meanwhile, Amazon will continue to use its own Graviton, Trainium, and Nitro chips alongside Qualcomm’s technology.
Can Qualcomm Challenge NVIDIA?
Qualcomm is entering a market dominated by NVIDIA, which reported $89 billion in data center revenue in its most recent quarter and has built a massive business around AI chips. Amazon also has its own AI chips, which could make the competitive landscape even tougher for Qualcomm. The Amazon deal gives Qualcomm a major customer and a platform to demonstrate its chip capabilities in a broader market. However, a single deal is unlikely to be enough to rival NVIDIA’s entrenched position. While this partnership may help Qualcomm reduce its dependence on smartphone chips, early data center deals may yield lower profit margins than its phone business.
The $60 billion figure is not guaranteed revenue; future orders will determine how much business Qualcomm actually receives from Amazon. For now, the deal provides Qualcomm with a strong entry into the rapidly growing AI chip market.
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