Amazon, Qualcomm Form $4 Billion AI Alliance to Develop Inference Chips

[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 shares rose more than 3% even as U.S. stocks fell across the board.
Qualcomm agreed to participate as a partner in expanding AI infrastructure at Amazon Web Services (AWS) data centers.

According to a filing with the United States Securities and Exchange Commission (SEC), Qualcomm granted Amazon warrants to purchase 25 million of its shares at $161.26 per share as part of the agreement. The warrants are worth a total of $4 billion.
In a press release, Qualcomm said it would work with Amazon on "multi-generational custom chips" and focus on AWS’s AI infrastructure, particularly the development of inference chips.
The two companies noted that the exponential growth of AI workloads is creating 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 and the CPU (central processing unit) or GPU (graphics processing unit). The statement added that the partnership would combine Amazon’s comprehensive, secure, and cost-effective AI infrastructure with Qualcomm’s power-efficient chip designs and system integration capabilities.

According to CNBC, Qualcomm is known for chips used in smartphones and other mobile devices, but expanded into the data-center market by unveiling its Dragonfly C1000 data-center CPU last June. The company previously said Meta Platforms would use the chip once mass production begins in 2028.
The Dragonfly C1000 was designed for AI agents and offers outstanding computing performance while reducing power consumption. Based on this chip, Qualcomm set a data-center revenue target of $15 billion for fiscal 2029, which begins in October 2028.
The warrants issued by Qualcomm will remain valid until September 3, 2036. Amazon may exercise the warrants incrementally to purchase shares whenever it fulfills certain commercial agreements. These agreements include purchases of up to $60 billion worth of Qualcomm server chips and other technologies.

NVIDIA’s GPUs initially dominated the AI-chip market, but CPUs are gradually emerging as a key resource driving the boom.
GPUs are optimized for training and running AI models, while CPUs have emerged as essential for AI inference, the stage that follows training.
Bank of America forecasts that the CPU market will more than double over five years, growing from $27 billion last year to $60 billion by 2030.
As a result, NVIDIA unveiled a CPU optimized for AI agents last March, while demand for CPUs from Intel and Advanced Micro Devices (AMD) is also surging.

[email protected] Song Kyung-jae Reporter