Qualcomm shares jumped 10% on Tuesday after the company announced a partnership with Amazon Web Services on data center infrastructure. For the chipmaker, the deal is an important step in its push to strengthen its position in the AI market and compete with Nvidia.
According to a press release, Qualcomm and AWS will jointly develop multiple generations of customized chips for Amazon’s AI infrastructure. The main focus will be inference — running already trained AI models.
Qualcomm said the rapid growth of AI workloads is sharply increasing demand for computing power, memory, networking and energy-efficient infrastructure. The company plans to combine AWS’s cloud capabilities with its own expertise in power-efficient processors and system design.
Qualcomm moves beyond smartphones
Qualcomm is best known as a supplier of processors for smartphones and mobile devices, but this year the company has stepped up its expansion into the data center market. In June, it unveiled the Dragonfly C1000 processor, designed for servers and agentic AI workloads. Meta plans to start using it once mass production begins in 2028.
Qualcomm has said it expects to generate around $15 billion in data center revenue by fiscal 2029. Its roadmap includes not only server CPUs, but also dedicated AI chips and products designed to connect multiple accelerators into a single system.
The AWS partnership is the second major sign of interest in Qualcomm’s new strategy from a technology giant. Meta had already backed the company’s data center ambitions, and Amazon has now joined it while spending hundreds of billions of dollars annually on AI infrastructure.
Why demand for AI chips is growing
Demand for AI chips is rising alongside the spread of generative and agentic AI. Companies are launching more models and services that require huge amounts of computing power not only for training but also for everyday use. Demand is growing particularly quickly for inference — running trained models when users send requests to chatbots, AI assistants and other services.
At the same time, major technology companies are investing hundreds of billions of dollars in data centers and trying to reduce their dependence on a single supplier. Nvidia remains the market leader, but Amazon, Meta, Google and other companies are interested in alternative chips that could be cheaper and more energy-efficient. That gives Qualcomm, AMD and other manufacturers a chance to capture part of the rapidly expanding market.
Qualcomm has also introduced new artificial intelligence initiatives.
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