Full Breakdown
Qualcomm and AWS Forge Multi-Billion-Dollar AI Data-Center Partnership
9/9/2026, 12:28:29 PM
Core Deal Overview
Qualcomm announced a long-term supply agreement with Amazon Web Services (AWS) valued at up to $60 billion for custom AI data-center semiconductors. The partnership centers on “inference” chips that run trained AI models and on optical interconnect technology capable of 1.6 terabits per second. In a related filing, Qualcomm issued Amazon warrants to purchase 25 million shares at $161.26 each, representing a $4 billion investment. The warrants expire on September 3 2036 and will vest in tranches tied to commercial milestones.
Background and Market Context
Qualcomm, long known for smartphone processors, has been diversifying after acquiring optical-interconnect firm Alphawave for $2.4 billion. In June, the company unveiled its “Dragonfly C1000” data-center CPU, slated for Meta deployment in 2028, signaling a push into the AI infrastructure market dominated by Nvidia.
Parallel to Qualcomm’s moves, glass-maker Corning secured a multi-year, multi-billion-dollar fiber supply agreement with Verizon that runs through 2032 and calls for more than 80 million miles of high-density optical fiber. Verizon intends to use the fiber for its “AI Connect” strategy, which targets direct connections to data centers and the retrofitting of central offices for edge-inference computing.
Data and Financial Highlights
- Supply agreement value: up to $60 billion for custom AI chips.
- Warrant issuance: $4 billion (25 million shares at $161.26).
- Qualcomm’s revenue target: $15 billion in data-center sales by fiscal 2029.
- CPU market projection: Bank of America expects the market to grow from $27 billion in 2025 to $60 billion by 2030.
- Corning’s performance: 90 % year-to-date stock gain, driven by fiber contracts with Amazon and Verizon.
- Verizon fiber footprint: over 32 million fiber passings by the end of 2026, with a goal of 40-50 million locations over the medium term.
Official Statements & Responses
Qualcomm CFO Akash Palkhiwala said revenue from manufacturing chips for Amazon is expected to begin in the December quarter and will be a “core component” of meeting the company’s $15 billion data-center revenue target for fiscal 2029.
“The agreements we have signed are the leading edge of a strategy that will become a meaningful incremental leg of growth for Verizon,” — Dan Schulman, CEO
Verbatim Quotes
- “This deal is exactly the kind of progress Qualcomm needed to give the market confidence that its ambitious data center business targets can actually be achieved.” — Bob O'Donnell, chief analyst at TECHnalysis Research
What’s Next
- Qualcomm anticipates that chip-manufacturing revenue for AWS will start in the December quarter, with subsequent tranches of Amazon warrants vesting as commercial thresholds are met before September 3 2036.
- Verizon plans to expand its fiber network to 40-50 million locations over the medium term, supporting the rollout of AI edge capabilities.
- Qualcomm aims to achieve $15 billion in data-center semiconductor sales by fiscal 2029, leveraging the AWS partnership and its broader product roadmap.
