Qualcomm and Amazon team up on AI chip development, optical networking

Qualcomm has signed a major deal with Amazon, under which it will supply customized chips and networking hardware for Amazon data centers.

The 'multi-generation' collaboration covers customized silicon for Amazon's large-scale AI data centers, bringing together the hyperscaler’s AI infrastructure and Qualcomm's power-efficient processing, silicon design, and system-level integration.

The deal will also cover high-performance optical connectivity solutions specifically designed to support the growing scale and bandwidth demands of AI infrastructure, with speeds extending up to 1.6T and eventually beyond.

This work will be based on Qualcomm Technologies’ SerDes and optical DSP technologies.

"As AI demand accelerates, data center infrastructure will require advances in both computing and connectivity to deliver greater performance with more efficiency,” said Cristiano Amon, president and CEO of Qualcomm.

“Qualcomm is pleased to work with AWS on customized silicon and connectivity solutions, bringing decades of leadership in advanced processing and power-efficient compute, to deliver breakthrough performance and enable the next generation of AI infrastructure.”

As part of the deal, Qualcomm plans to expand its use of AWS AI infrastructure, including Amazon Bedrock, for its own electronic design automation (EDA) workloads, hoping to cut the time of chip design cycles.

The deal forms part of a broader announcement that will see Qualcomm issue warrants to acquire 25 million shares in Amazon for a total investment of $4 billion.

The issuance of some shares is contingent on Amazon purchasing up to $60 billion worth of Qualcomm products.

“This collaboration with Qualcomm Technologies builds on a strong foundation of partnership and reflects our shared commitment to pushing the boundaries of what’s possible,” said Prasad Kalyanaraman, vice president at AWS.

“By working together on customized silicon and advanced connectivity, we’re delivering more performant, efficient, and cost-effective infrastructure for our customers.”

Qualcomm eyes market gains

Qualcomm has hopes of challenging Nvidia's dominant position in the AI data center market. The latter currently holds between 80% and 90%, according to figures from Silicon Analysts, although the figure is predicted to fall to 75% this year. AMD is in second place.

Earlier this summer, Qualcomm updated its Dragonfly A1000 CPUs, Qualcomm High Bandwidth Compute (HBC), and its AI300 inference accelerator. All are engineered to maximize performance per watt and token throughput at lower total cost of ownership (TCO), the company said.

The company recently named Meta as its first customer, with production expected to begin in 2028 and to continue as Meta's server fleet expands. It has also, along with Nvidia and AMD, has signed a memorandum to supply the EU’s AI gigafactories.

Optical networking, meanwhile, is a major element of Amazon’s data center strategy, with the firm buying billions of dollars worth of hardware from fiber-optic cable manufacturer Corning earlier this year.

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