Qualcomm scored a marquee partner in AWS as it tries to chip away at Nvidia's AI lead, and investors noticed. The stock rose 4% on the day of the announcement. In an SEC filing, Qualcomm said it issued Amazon warrants covering 25 million shares at an exercise price of $161.26 per share, which would represent $4 billion in total if Amazon exercises them all.
The warrants expire on Sept. 3, 2036. Qualcomm said the warrant eligibility will accrue in portions based on hitting certain commercial milestones, including potential purchases that could reach up to $60 billion across its server chips and other offerings.
The companies said they will work together on a series of bespoke chip designs spanning many iterations, aimed at expanding AWS's AI infrastructure, with emphasis on inference. Qualcomm framed the pairing as bringing together Amazon's broad, secure, price conscious AI stack with Qualcomm Technologies' strengths in low power processing, chip architecture and system integration, all at a time when AI workloads are booming and demanding ever more compute, memory bandwidth, networking and energy efficiency.
Best known for smartphone chips, Qualcomm has been moving deeper into the data center. In June it introduced the Dragonfly C1000 CPU for servers, built for agentic AI and designed to deliver performance while curbing power use. Qualcomm said Meta plans to deploy it when Meta begins production in 2028.
The company is targeting $15 billion in data-center sales in fiscal 2029 and laid out a roadmap that includes multiple products, among them an AI accelerator and a way to stitch multiple chips together. Teaming with AWS gives Qualcomm another vote of confidence from a hyperscaler. Like Meta, Amazon's annual outlays for AI infrastructure are climbing toward the hundreds of billions of dollars.
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Nvidia now stands as the world's most valuable company after seizing leadership in graphics processing units, which are crucial for training cutting edge models and running the most demanding AI jobs. But CPUs are increasingly central too. GPUs pack thousands of small cores for parallel work, while CPUs use fewer, more powerful cores for sequential, general purpose tasks. Intel and Advanced Micro Devices are already seeing strong data-center CPU demand, and Nvidia in March shared more details on its own agentic focused CPUs. As Nvidia's Dion Harris put it to CNBC, "CPUs are becoming the bottleneck in terms of growing out this AI and agentic workflow."
This deal is about scale and staying power. AWS is signaling long term demand for AI infrastructure, and Qualcomm is lining up product bets - and potential purchase commitments - to meet it. If the AI buildout keeps accelerating, more of that spend could shift from niche to mainstream vendors, and investors will be watching who wins inference workloads as CPUs take on a bigger role next to GPUs.
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