Qualcomm Issues $4B in Warrants to Amazon for Custom Silicon
Qualcomm has issued Amazon warrants for the purchase of 25 million shares at $161.26 each, totaling approximately $4 billion. This agreement is part of a multi-generation custom silicon deal for Amazon Web Services (AWS), as reported by CNBC.
Milestones and Vesting:
The warrants vest in stages tied to commercial milestones and Amazon’s commitment to purchase up to $60 billion in Qualcomm server chips and technology over time. They expire in 2036.
Scope of Work:
The collaboration involves AI inference and optical connectivity up to 1.6T, utilizing Qualcomm’s SerDes and optical DSP technologies. Additionally, Qualcomm will leverage Amazon Bedrock for chip design workloads.
European Context
This move by Qualcomm comes amid a significant European initiative. The company is one of three chipmakers, alongside Nvidia and AMD, that have signed memoranda to supply the European Union’s AI gigafactories program. This program aims to establish up to seven sites with a total investment of approximately €30 billion, with €1 billion in direct funding from Brussels.
Construction is set to begin in early 2028, with sites becoming operational mid-year. Europe’s own data center processor, Rhea1, an 80-core Arm design from SiPearl, is expected to power the Jupiter supercomputer at Julich, rather than being exclusively used by hyperscalers.
Market Projections and Future Trends
Bank of America predicts that the server processor market will grow exponentially, reaching $60 billion by 2030, up from $27 billion in 2025. This growth is driving competition among major players like Nvidia, Intel, and AMD to enter the market.
As Europe asserts its presence in this domain, the other side of this development is the question of access versus sovereignty, as highlighted by TNW in a previous article.