Qualcomm Inc. today announced that it has won a contract to supply Amazon.com Inc. with artificial intelligence chips and networking hardware.
The deal is part of a broader partnership that also extends to other areas. Qualcomm has issued a stock warrant that will enable Amazon to buy up to 25 million shares worth $4 billion. The stock will vest in tranches through 2036. According to a regulatory filing, the issuance of some shares is contingent on Amazon purchasing up to $60 billion worth of Qualcomm products.
“By working together on customized silicon and advanced connectivity, we’re delivering more performant, efficient, and cost-effective infrastructure for our customers,” said Amazon Web Services Vice President Prasad Kalyanaraman.
The companies will collaborate on the development of “customized silicon at scale for large-scale AI data centers.” Qualcomm describes the collaboration as “multi-generational,” which indicates that it plans to provide Amazon with multiple generations of chips. The companies indicated that the chips will be optimized for inference workloads.
The deal comes three months after Qualcomm announced a multi-generational AI chip contract with another tech giant. Meta Platforms Inc. has agreed to buy several future iterations of the Dragonfly C1000, a central processing unit series optimized for AI servers. The most advanced chips in the series will feature more than 250 cores with a top frequency in excess of five gigahertz.
The other focus of Qualcomm’s partnership with Amazon is optical network equipment. Optical networks are used to link together the servers inside AI clusters. According to the companies, Qualcomm will provide Amazon with SerDes and DSP technologies.
Servers represent the data they process as electrical signals. A DSP, or digital signal processor, is a chip that turns those signals into light that can travel over fiber-optic cables. It also performs several related tasks.
Data-carrying electrical signals move inside a server processor in the form of multiple parallel information streams. Qualcomm’s DSPs include a so-called SerDes module that consolidates those streams into a single stream. That makes it easier to transmit information from a server CPU to external components. Additionally, the SerDes module helps reduce the amount of power required to move data.
Qualcomm’s most advanced optical DSP is called the CO400. The chip can transmit data over distances of up to 12 miles, which makes it suitable for linking together data centers. The CO400 uses a technology called forward error correction to reduce the risk of transmission errors. It works by enriching data streams with additional information that enables the recipient to fix degraded optical signals.
Optical networking is a major focus of Amazon’s data center strategy. In June, it agreed to buy billions of dollars worth of hardware from Corning Inc., a leading fiber-optic cable manufacturer. A few months earlier, the retail and cloud giant detailed an internally developed network design dubbed RNG. It uses fiber-optic cables arranged in a semi-random configuration to optimize the flow of traffic.
Qualcomm, for its part, plans to expand its use of AWS as part of the partnership. It will use Amazon Bedrock, a managed AI service, to run electronic design automation applications. Those are programs that help engineers create and test chip blueprints. Qualcomm expects the initiative to speed up its product development efforts.
