Amazon.com, Inc. and Qualcomm form $4 billion AI alliance... develop inference chip

[Financial News] Amazon.com, Inc. and Qualcomm formed a $4 billion (approximately 5.36 trillion won) artificial intelligence (AI) alliance on the 8th (local time). Qualcomm's stock price jumped more than 3% amid a general decline in the New York stock market.
Qualcomm has decided to participate as a partner in expanding the AI infrastructure of Amazon Web Services (AWS) data centers.
According to a filing with the United States Securities and Exchange Commission (SEC), as part of the agreement, Qualcomm granted Amazon.com, Inc. the right to acquire 3.75 million of its own shares at $161.26 per share. Depending on Amazon.com, Inc.'s future purchase amount, the available shares could increase to a maximum of 25 million shares, or approximately $4 billion.
In a press release, Qualcomm announced that it will engage in technical cooperation with Amazon.com, Inc. "on multi-generation custom chips" and focus on AWS's AI infrastructure, particularly the development of inference chips.
Qualcomm plans to shorten the chip design cycle by leveraging Amazon Bedrock and AWS's AI infrastructure in the semiconductor design process as well. The two companies have also agreed to cooperate on the development of ultra-high-speed optical connectivity solutions.
The two companies pointed out that the exponential growth of AI workloads is driving unprecedented demand for computing, storage, networking, memory bandwidth, and energy-efficient infrastructure. Memory bandwidth refers to the maximum amount of data that can be exchanged per second between memory, the CPU (Central Processing Unit), and the GPU (Graphics Processing Unit). The statement added that this collaboration combines Amazon.com, Inc.'s comprehensive, secure, and cost-effective AI infrastructure with Qualcomm's power-efficient chip designs and system integration.
According to CNBC, Qualcomm is known for chips for mobile devices, including smartphones, but it expanded its scope last June by unveiling the 'Dragonfly C1000,' a CPU for data centers. It has been revealed that Meta Platforms Inc. will use this chip once mass production begins in 2028.
The Dragonfly C1000 is a chip designed for AI agents that offers excellent computing power while keeping power consumption low. Based on this chip, the company has set a data center revenue target of $15 billion for the 2029 fiscal year, which begins in October 2028.
The warrants issued by Qualcomm are valid until September 3, 2036. Amazon.com, Inc. may exercise these rights in stages to acquire shares as it fulfills specific commercial agreements. This includes the purchase of up to $60 billion in Qualcomm server chips and other technologies.
Initially, NVIDIA Corporation's GPUs were the mainstay of AI chips, but CPUs are gradually becoming the core resource driving the boom.
While GPUs are optimized for training and running AI models, CPUs have emerged as the core of AI inference, the next step after training.
Bank of America forecasts that the CPU market size will more than double over five years, from $27 billion last year to $60 billion by 2030.
For this reason, NVIDIA Corporation unveiled a CPU optimized for AI agents last March, and demand for Intel and Advanced Micro Devices, Inc. (AMD) CPUs is also surging.
[email protected] Song Gyeong-jae Reporter