Qualcomm’s $60 Billion AWS Server Chip Pact Rekindles Memories of Its Centriq Retreat

Qualcomm is taking another run at the data center market, announcing a wide-ranging agreement under which Amazon could purchase as much as $60 billion in server chips and related technology over ten years. The two companies intend to develop successive generations of custom silicon for Amazon Web Services, with the first designs focused on AI inference — the task of running already-trained models in production. Qualcomm shares climbed 3% on the news.

The scale of the commitment is notable for a company whose previous attempt at server processors ended quickly. In November 2017, Qualcomm announced commercial availability of the Centriq 2400, which it billed as the world’s first 10-nanometer server processor. Within six months, Bloomberg reported that Qualcomm was preparing to abandon the effort. By the end of 2018, the company’s data center group had been slashed from a peak of more than 1,000 employees to roughly 50.

The stakes for Qualcomm now are considerably higher. The company has built its business on wireless technologies and mobile processors, and its 2017–2018 server push came as it faced broader corporate turbulence. A decade-long, potentially $60 billion purchase commitment from one of the world’s largest cloud providers — carrying a market capitalization of roughly $2.99 trillion — would give Qualcomm a level of demand visibility the Centriq program never had.

For Amazon, the deal fits a broader industry pattern of cloud operators commissioning custom chips rather than relying solely on general-purpose processors. AWS has developed its own silicon lines, and co-developed inference chips could help it tune hardware to the workloads driving its cloud revenue. Amazon shares traded up 0.23% at $251.89 on the day, while Qualcomm edged up 0.12% to $168.74.

Still, the server market has proven unforgiving for newcomers, and the fate of the Centriq line remains a cautionary reference point for the chipmaker’s second act in data centers. Whether the new partnership’s custom, inference-focused approach and long-term commitment are enough to sustain a durable business will unfold over years rather than quarters.

Source: original release

What to watch

• Qualcomm’s upcoming earnings reports for commentary on data center revenue and program milestones.
• Details on the first AWS-focused chip generation, including timelines for sampling and deployment.
• Any disclosures on the pace of the $60 billion purchase commitment or volume targets.
• Broader hyperscaler announcements on custom AI silicon that could shape the competitive landscape.