Qualcomm issued a warrant to an Amazon affiliate on Tuesday for 25 million shares valued at $4 billion, locking the e-commerce giant into a partnership that could see it buy up to $60 billion of custom data-center silicon over the next decade. The warrant expires Sept. 3, 2036, and is structured around purchase-order agreements rather than a straight equity investment, meaning Amazon’s stake only materializes if the orders flow.
The silicon roadmap
The deal covers multiple generations of chips for artificial intelligence inference and optical connectivity running as fast as 1.6 terabits per second. Qualcomm plans to lean on its optical digital signature processor technologies while Amazon Web Services contributes its Bedrock cloud service. Cristiano Amon, Qualcomm’s president and chief executive, said the collaboration would “deliver breakthrough performance and enable the next generation of AI infrastructure.”
From handsets to hyperscalers
Qualcomm, based in San Diego, built its franchise on processors for phones, laptops, wearables, automotive and industrial gear. In June it unveiled the Dragonfly C1000, its first central processing unit for data centers, with Meta already committed for server deployments. At the company’s investor day, chief financial and operating officer Akash Palkhiwala set a target of more than $15 billion in data-center revenue by fiscal 2029, aiming for a portfolio split roughly three ways across handsets, data centers and a combined industrial-internet-of-things-and-automotive segment.
The hyperscaler arithmetic
Amazon and Meta have each signaled capital spending in the hundreds of billions for AI data centers, according to Data Center Dynamics. Qualcomm now has two of the largest buyers lined up before it has shipped meaningful volume. The warrant structure transfers inventory risk to Amazon: if the custom chips underperform or the AI build-out slows, the share issuance never happens. That is a cleaner arrangement than the equity-for-supply swaps that littered the last semiconductor cycle.
What to watch
The $60 billion ceiling is a ceiling, not a forecast. Revenue recognition will depend on tape-out schedules, yield rates and whether Amazon’s internal silicon teams, already building Trainium and Inferentia, decide Qualcomm’s roadmap is worth the opportunity cost. The next milestone is fiscal 2029, when Palkhiwala’s $15 billion target either validates the pivot or joins the long list of data-center ambitions that never scaled.