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Why Amazon is buying $60 billion of Qualcomm chips - and a stake in the San Diego company
San Diego Union-Tribune • • business
Key Points:
- Qualcomm announced a $60 billion deal with Amazon Web Services to supply AI data center chips over the next decade, with Amazon also obtaining rights to buy $4 billion of Qualcomm stock as part of the agreement.
- The deal marks a strategic shift for Qualcomm from its traditional smartphone business, which currently accounts for 70% of its revenue but is expected to shrink to about one-third by 2029 due to Apple’s upcoming split.
- Qualcomm aims to grow its data center revenue to $5 billion by 2027 and $15 billion by 2029, focusing on low-cost, low-power inference computing chips for AI tasks, both in data centers and on devices.
- Analysts view the Amazon partnership as a significant milestone that confirms Qualcomm’s transition to data center markets, though some caution that the deal aligns with previously announced targets rather than exceeding them.
- Qualcomm hinted at another major hyperscaler partnership in progress, reinforcing investor confidence in the company’s execution of its growth strategy beyond smartphones.
