Amazon Just Handed Qualcomm a Slice of AWS's AI Buildout

Amazon's cloud computing unit, Amazon Web Services (AWS), has entered into a multi-generational product collaboration with Qualcomm to develop next-generation artificial intelligence data center infrastructure. The agreement expands AWS's custom silicon strategy beyond its proprietary Trainium chips and incumbent supplier Broadcom, focusing on customized silicon for AI inference workloads and 1.6T optical connectivity. The strategic deal is supported by massive scale at AWS, which currently holds a backlog of $496 billion and reported Q2 FY2026 revenue of $42.2 billion—a 36.7% year-over-year increase. AWS's annualized run rate has expanded to $169 billion, while cash capital expenditures reached $53.1 billion during the quarter. Furthermore, Amazon plans to double its power capacity by the end of 2027 compared to 2025 levels. For Qualcomm, the partnership marks its second major hyperscaler win following Meta, aligning with its target to reach $15 billion in data-center revenue by fiscal 2029. While the contract validates Qualcomm's expansion beyond mobile handsets, it also pressures Broadcom's market dominance as hyperscalers pursue dual-sourcing strategies.