Qualcomm handed Amazon a warrant for 25 million shares to sell it server chips

Qualcomm issued Amazon a warrant for up to 25,000,000 of its own shares at an exercise price of $161.26, vesting against Amazon purchases of Qualcomm server chips, technology, systems and manufacturing services worth as much as $60 billion. The warrant was signed on September 3rd. Qualcomm disclosed it in an 8-K on September 8th, the same morning it put out a press release headlined "multi-generational product collaboration" that mentions none of it.

Read the release and you get nouns. Customized silicon. Optical connectivity "extending up to 1.6T." A plan to move Qualcomm's own chip-design workloads onto Amazon Bedrock. No product name, no volume, no dollar figure, no date beyond "multi-generation."

Qualcomm@Qualcomm

We're announcing a multi-generation collaboration with @awscloud to build next-generation AI data center infrastructure, working together on customized silicon and AI inference at scale.

Read the announcement: t.co/dsGwzI0PFh
Read the 8-K: t.co/YlngSiczfD t.co/6hOJYpHveY

Then there is Item 3.02.

The Warrant Shares vest in tranches tied to the execution of certain commercial arrangements, the placement of binding purchase orders and actual purchases of QTI's server chip products, technology, systems and manufacturing services by Amazon during the term of the Warrant, up to a maximum amount of $60 billion in payments, with 3,750,000 shares being vested upon issuance of the Warrant based on initial purchase commitments.

Some arithmetic the filing leaves to you. Twenty-five million shares is 2.4% of the 1.05 billion Qualcomm reported outstanding on July 27th. At the strike they would cost Amazon a little over $4 billion to exercise, and the warrant runs until September 3rd, 2036. The $60 billion ceiling is roughly 1.35 times everything Qualcomm sold in fiscal 2025 — handsets, licensing, automotive, the lot.

And 3,750,000 shares vested on day one, "based on initial purchase commitments." That is 15% of the total. If the tranches are linear, and nothing in the filing says they are, Amazon has already committed around $9 billion. Our guess is that the early tranches are front-loaded and the real number is smaller, which would be the ordinary way to write one of these.

Who needed this deal?

The structure answers it. Equity that vests only when purchase orders land costs Qualcomm nothing if the orders never come (which is the honest argument for doing it, and a good one). But the direction of payment is not ambiguous. The supplier is handing stock to the customer, and Cristiano Amon's quoted line about being "pleased to work with AWS" reads differently once you know the price of the pleasure.

The fair objection is that Amazon gets no votes while the warrant is unexercised, that this is now standard in large silicon supply agreements, and that a contingent cost is a cheap way to buy a decade of design-in. All true. It still tells you the bargaining position. Amazon has Annapurna's Trainium line, and on August 26th it agreed with NVIDIA to take 2 million additional GPUs and to put NVLink Fusion and NVHBM into Trainium4. A buyer holding three roadmaps (Trainium, NVIDIA, and now this) does not have to pay for a fourth.

We would expect Qualcomm's fiscal 2026 10-K, due around November, to carry the warrant as consideration payable to a customer — that is, netted against revenue rather than booked as an expense — and to still show no separate data centre revenue line. If a data centre line appears with a number above $1 billion, we were wrong about how early this is.

Qualcomm says it expects to file a resale prospectus supplement for the warrant shares. Registration statements are chattier than press releases, and they are written by lawyers rather than by the communications team. Watch for that one.