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Amazon's Qualcomm warrant vests in tranches tied to up to $60bn in chip purchases
The warrant runs to 2036 and the purchase ceiling is four times Qualcomm's own 2029 data centre target, which says more about who the deal reassures than about anything an AWS customer can provision this quarter.
The Product Desk · Product desk
What happened
- Qualcomm won a contract to supply Amazon with customised silicon optimised for inference workloads, plus networking hardware, in a collaboration both firms call multi-generational.
- A regulatory filing ties issuance of some of those shares to Amazon buying up to $60bn worth of Qualcomm products, with vesting in tranches through 2036.
- Traffic runs the other way too: Qualcomm will move its electronic design automation workloads onto Amazon Bedrock to speed up chip development.
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Why it matters
- cost Whatever discount Amazon earns on its chip bill is decided by Qualcomm's share price above $161.26, not by how the silicon performs, so the buyer's saving and the supplier's execution have been unbundled.
- constraint Reaching the ceiling would mean Amazon volume worth four years of Qualcomm's target data centre business, which makes one customer's roadmap the constraint on Qualcomm's own.
- precedent Equity handed to a customer for agreeing to be a customer is now a normal term in AI infrastructure, per TNW, and it will be read as a supply commitment by people who never see the warrant schedule.
- exposure Europe's gigafactory programme, with roughly EUR 1bn of about EUR 30bn actually committed from Brussels, is queuing behind a supplier that has just promised multiple generations to a buyer with $60bn attached.
The person who has to book inference capacity for next quarter gets nothing new to book. Neither announcement carries a part number, a ship date, or an instance family for the Qualcomm silicon, and the only dated data centre chip in Qualcomm's pipeline belongs to Meta, from 2028 [10][5].
The $4bn figure is the one doing the work. The warrant covers 25 million shares at $161.26 each [4], and 25,000,000 times 161.26 is $4.03bn [1], which is the size of a position Amazon may buy rather than a sum anyone hands over. Amazon pays that cash at exercise. What it collects is whatever Qualcomm trades above $161.26 between now and expiry on 3 September 2036 [4]. Set against a purchase ceiling of up to $60bn [3], the notional is 6.7% of the spend [4], and the realised value is some fraction of that, decided by Qualcomm's share price rather than by how the chips perform.
The $60bn is a ceiling, not a plan. Qualcomm's own target for fiscal 2029 data centre revenue is $15bn [11], so the ceiling is four years of that business running at target [2]. Bank of America expects the entire server processor market to reach $60bn by 2030, up from $27bn in 2025 [12], which puts Amazon's ceiling at one full year of that market [3]. Written into a warrant with a decade to run [14], a number that large is vesting headroom, not an order book.
What does exist with dates and invoices attached is the reciprocal traffic. Qualcomm will run its electronic design automation workloads on Amazon Bedrock [9]. The optical half of the deal covers connectivity up to 1.6T using Qualcomm's SerDes and optical DSP [7], and Qualcomm's CO400 DSP reaches up to 12 miles, far enough to link separate data centres [8]. That is fabric between and inside buildings, alongside the fibre Amazon agreed to buy from Corning in June [16]. AWS vice president Prasad Kalyanaraman called the collaboration "more performant, efficient, and cost-effective infrastructure for our customers" [13]. Cost-effective for the party doing the building is a different line item from cheaper for the tenant, and the filings do not connect the two.
Calling this a race inside AWS is an inference the documents will not carry: neither announcement names the alternative Qualcomm silicon is displacing there. Qualcomm's competitive company appears elsewhere, in the memoranda it signed with Nvidia and AMD to supply the EU's AI gigafactories [15].
The thing being pitched and the thing being done separate on two points. There is no dated, orderable item here. There is a change to a supplier's incentives inside the term of the contract about to be signed: for anyone negotiating Qualcomm parts, or modelling AWS inference capacity for 2028 and later, that change is real, because Qualcomm now has a $60bn ceiling and a warrant clock to design against.
A third supplier does not by itself create leverage at the next renewal. A rate card moves when a region has the instance and a quota behind it, and no date for that appears anywhere in this deal.
What to watch
- Qualcomm disclosing which warrant tranches have vested, which would show how much of the $60bn Amazon has actually ordered.
- An AWS region listing an instance family built on Qualcomm silicon with a published quota, which would turn a filing into a procurement option.
- Any slip in Meta's 2028 Dragonfly C1000 date, which is the only dated reference point behind the multi-generational language.