Key Takeaways
- Qualcomm shares rose 3% after the AWS data center partnership announcement.
- Amazon received warrants covering 25 million Qualcomm shares at $161.26 each.
- Qualcomm targets $15 billion in data center sales by fiscal 2029.
Qualcomm shares rise 3% on Tuesday after the company announced a data center infrastructure partnership with Amazon Web Services. The agreement covers multiple generations of customized silicon for AWS, with a focus on artificial intelligence inference. Amazon will also receive warrants to acquire 25 million Qualcomm shares.
Qualcomm Expands Data Center Strategy With AWS
The warrants give Amazon the right to purchase Qualcomm shares at $161.26 each, representing a total investment of $4 billion. The warrants expire on September 3, 2036, and the shares will vest in stages based on commercial arrangements between the companies. The deal has also contributed to renewed investor interest, with Qualcomm Shares Rise reflecting positive sentiment around the company’s expansion.
The arrangements include the potential purchase of up to $60 billion worth of Qualcomm server chips and related technology. The agreement gives Qualcomm a major data center customer as it expands beyond its traditional smartphone processor business, supporting the outlook behind Qualcomm Shares Rise and the company’s growing presence in the AI infrastructure market.Qualcomm has been building its data center business through several new products. In June, the company introduced the Dragonfly C1000 central processing unit for data centers. Meta is expected to use the processor when production begins in 2028.
The Dragonfly C1000 is designed for artificial intelligence workloads that require computing performance while limiting power use. Qualcomm has set a target of $15 billion in data center sales by fiscal 2029.
The company also has a product roadmap that includes artificial intelligence chips and technology designed to connect multiple chips within data center systems.
CPU Demand Grows As AI Infrastructure Expands
The AWS agreement comes as demand for data center processors grows alongside artificial intelligence infrastructure spending. Graphics processing units remain widely used for training and running advanced AI models, but central processing units are also becoming more important for broader AI workloads.
GPUs use thousands of smaller cores that can perform many operations at the same time. CPUs have fewer, more powerful cores designed for general-purpose computing and sequential tasks. Data centers use both processor types for different parts of AI systems.
The CPU market could grow from $27 billion in 2025 to $60 billion by 2030. Intel and Advanced Micro Devices have also reported stronger demand for their data center CPUs, while Nvidia has introduced CPUs designed for AI-focused computing.
Qualcomm’s partnership with AWS adds another major technology company to its data center customer base. The company is now competing in a market that includes established processor makers and Nvidia’s expanding portfolio.
Qualcomm’s move also reflects the growing role of CPUs in AI infrastructure. Its focus on power-efficient processing is tied to the rising computing and energy needs of data centers.
The AWS agreement strengthens Qualcomm’s position in the data center market while providing a commercial framework for future server chip purchases. Its performance in this segment will depend on product development, customer adoption, and the delivery of its planned processor roadmap.
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