Key points
- Qualcomm will build custom AI inference chips for Amazon
- Amazon gets a warrant on 25 million Qualcomm shares
- The warrant vests on up to $60 billion of purchases
- It was issued five days before the announcement
Qualcomm (QCOM) is going to design custom AI chips for Amazon's (AMZN) data centers, and Amazon is getting a warrant on 25 million Qualcomm shares in return. Qualcomm's shares were up 5.4 percent at $177.83 on Tuesday, September 8, as of 10:26 a.m. Eastern, after reaching $183.49 earlier in the session.
The two companies announced the collaboration on Tuesday morning. The chips are for AI inference, the work of running trained models for users. The companies will also work on optical connections between data center equipment at speeds up to 1.6 terabits a second, using Qualcomm's SerDes and optical DSP chips, which convert and carry data between electrical and optical links. The warrant terms come from a filing Qualcomm made with the SEC the same morning.
What the warrant gives Amazon
Amazon can buy up to 25 million Qualcomm shares at $161.26 each, according to the filing. That is about 2.4 percent of Qualcomm's 1.05 billion shares outstanding, by our arithmetic from Robinhood share-count data. Buying all of them would cost about $4.03 billion. At $177.83, the full warrant would have a $414 million spread over its exercise cost if fully vested, by our arithmetic. The warrant allows cashless exercise and expires on September 3, 2036.
Amazon received the warrant immediately. The filing says the shares "vest in tranches tied to the execution of certain commercial arrangements, the placement of binding purchase orders and actual purchases of QTI's server chip products, technology, systems and manufacturing services by Amazon during the term of the Warrant, up to a maximum amount of $60 billion in payments." QTI is Qualcomm Technologies, the subsidiary that sells the chips. The portion covering 3.75 million shares, 15 percent of the total, vested at issuance "based on initial purchase commitments." Vesting allows exercise; it does not itself transfer shares. The filing does not give the dollar thresholds for the remaining tranches or the size of the initial commitments.
The warrant is dated September 3, 2026, five days before Tuesday's announcement. The exercise price was about 4.4 percent below Qualcomm's September 4 close of $168.74, the last session before the announcement. The filing says Qualcomm expects to register the shares for resale, and that Amazon has no voting rights until it exercises.
What Qualcomm is selling
In October 2025, Qualcomm announced two inference accelerators, the AI200 for 2026 and the AI250 for 2027, and a first customer, Saudi Arabia's Humain, for 200 megawatts of racks. The Amazon announcement does not name those products. It describes "customized silicon" for AWS, which means chips designed to Amazon's specification rather than Qualcomm's standard parts. The press release gives no timeline for the first chips and no dollar value for the collaboration; the $60 billion figure appears only in the filing, as the ceiling on purchases that vest the warrant, not as a commitment.
Amazon already designs its own AI chips, the Trainium line. Tuesday's release does not say how Qualcomm's chips relate to Trainium. Qualcomm also said it will use more of AWS's AI services, including Amazon Bedrock, to run its own chip-design software.
How it compares with other AI warrants
It is the fifth such warrant, from a fourth issuer, that we have covered since August. AMD gave Meta and OpenAI warrants on 160 million shares each at a penny, vesting on up to 6 gigawatts of GPU purchases per customer. Marvell gave Google a warrant on 58.97 million shares at $206.58, vesting per $500 million of custom-chip revenue. HPE gave Oracle a warrant on 4.16 million shares at a penny, and disclosed it in a quarterly report two months after signing.
Qualcomm's warrant sits between them. The exercise price is close to the market, like Marvell's, rather than a penny, like AMD's and HPE's. The purchase ceiling, $60 billion, is the largest dollar figure any of the filings has attached to vesting. The warrant shares equal about 2.4 percent of Qualcomm's existing shares outstanding, compared with about 20 percent for AMD, 7 percent for Marvell and 0.3 percent for HPE, by our arithmetic from each company's share count. Actual ownership dilution would be smaller, since it is measured against the enlarged share count, and depends on how each warrant is exercised.
Even after the gain, Qualcomm remains about 32 percent below its May 29 high of $259.92, according to Robinhood market data. Amazon's shares were down 1.2 percent at $255.31 at the same time.
