Amazon and Qualcomm Agree to Develop Custom Chips for $4 billion
As part of a partnership to create specialized processors for artificial intelligence data centers. Qualcomm revealed on Tuesday that it has given Amazon a stock option, giving it the ability to purchase a share valued at around $4 billion.
In early trade, the San Diego, California-based chipmaker’s shares increased by more than 7%. This year, the stock has dropped by roughly 1%, with a rebound in August. Only partially offsetting sharp losses brought on by a decline in smartphone demand.
According to a regulatory filing, the option is tied to up to $60 billion in business volume and enables Amazon to buy Qualcomm shares at $161.26 each.
The businesses will work together to build chips for AI inference. A quickly expanding sector that is centered on executing learned AI models and has emerged as a major arena of competition for semiconductor makers.
In order to satisfy the increasing need for bandwidth in AI data centers. Qualcomm and Amazon will also develop high-speed optical communication technologies, including solutions that can reach 1.6 terabits per second.
In an effort to reduce development cycles, Qualcomm intends to increase its usage of AWS AI services and infrastructure for chip design jobs as part of the partnership.
