Qualcomm handed Amazon a warrant on 25 million shares for spending Amazon can skip

On September 8 Qualcomm said it would design custom AI silicon for Amazon across multiple generations of hardware, plus the optical parts that connect it. The headline number was 60 billion dollars of potential purchases through 2036. The number that actually binds anyone is in the filing: a warrant letting Amazon buy 25 million Qualcomm shares at 161.26 apiece, worth about 4 billion dollars at the strike, with 3.75 million shares vesting immediately and the rest unlocking as Amazon buys, per HotHardware's read of the terms. Three weeks earlier Marvell had done the same thing with Google, only bigger. Two of the largest semiconductor agreements of the year were paid for, in part, with the suppliers' own stock. The press releases do not put it that way, so I will.

The purchase is optional. The warrant is not.

Qualcomm CFO and COO Akash Palkhiwala described the structure himself on the day it was announced, and he did not hide the second half of it.

"We're looking at a transaction that is a long-term target of $60 billion in revenue over the next 10 years, and we're issuing warrants against it."

Akash Palkhiwala, Qualcomm CFO and COO, CNBC, September 8, 2026

Read the two clauses in order. The revenue is a target over a decade. The warrant exists now, expires in 2036, and vests in tranches as the orders land. Qualcomm shares rose more than 5 percent on the news. Asked why a warrant at all, Palkhiwala gave the answer that shows how normal this has become.

"This is a structure that has been adopted by a few players in the industry, and when we look at the net economics of this transaction to our shareholders, we think it's very attractive for them."

Akash Palkhiwala, Qualcomm CFO and COO, CNBC, September 8, 2026

A structure that has been adopted by a few players in the industry. That phrase is nine months old at most, and it now covers the two biggest custom silicon deals on the board.

Marvell wrote the template three weeks earlier

Matt Murphy, Marvell's chairman and CEO, sat with Jim Cramer on September 8 and was asked why he did not simply take the contract from Google and skip the equity. His answer treats the warrant as a price, which is the correct way to think about it.

"If you look at the economics and what was put on the table, and you look at the total value of the warrant, which is $120 billion total cumulative revenue to go get the 6.5%, we felt that trade was well worth it."

Matt Murphy, September 8, 2026, source

The filed terms are more specific than the round numbers. Google can buy 58,970,907 Marvell shares at 206.58 each, roughly 12.2 billion dollars at the strike. About 1.36 million shares vest quarterly over the first year. The other 57.6 million vest in 240 installments of 240,042 shares, one for every 500 million dollars of qualifying revenue, measured from August 2026 to January 2033. The Motley Fool worked through the schedule and landed on the part everyone skipped: Google has made no binding commitment to any level of purchase. The 120 billion dollar figure is not an order book. It is the number at which the warrant is fully vested.

Marvell stock jumped 13 percent when the deal broke and gave up 6 percent the next morning as the dilution sank in. 24/7 Wall St put it cleanly: a meaningful slice of future appreciation is already promised to the customer rather than to existing holders. Full exercise adds about 7 percent to the share count.

What the supplier is buying back

Murphy's explanation of why hyperscalers want equity in their vendors is the most revealing thing he said, and it is not about money.

"In this market, these large hyperscale customers and the ecosystem around it, it's really based on trust. In the end, can you trust the engineering team and the company is going to deliver the chip? Can you trust that the capacity and the supply is going to be there?"

Matt Murphy, September 8, 2026, source

I think that is honest and incomplete. Trust is what you have when a handshake works. A warrant is what you write down when the handshake is not enough, or when the counterparty wants to be paid for the risk that you fail. Note who else already owns a slice of Marvell: Nvidia put 2 billion dollars into the company in March alongside an NVLink Fusion partnership. Marvell's biggest customer, its biggest competitor and its ecosystem gatekeeper all hold paper in it now.

Amazon shopped an order Marvell already had a claim on

Cramer asked the uncomfortable version of the question: does trust survive when Amazon, a customer you have an amazing relationship with, hands custom silicon work to Qualcomm instead? Murphy did not flinch, and he did not really answer either.

"I think it's a competitive market, and kind of per my earlier comment, AI has now become the market to be in. But this is the market we identified 10 years ago. We have meaningful relationships with all the Big Four hyperscalers. We actually do custom silicon, Jim, for all four."

Matt Murphy, September 8, 2026, source

A minute later he called Marvell the Switzerland of this entire market. Switzerland with three armed neighbors holding options on the treasury. The guidance says the strategy is working: Murphy pointed out that last December Marvell guided to 10 billion this year and 13.5 billion in 2027, and now guides to 12 and 18. It also says why Amazon needed its own supplier. If your vendor does custom silicon for all four hyperscalers, its engineering attention is the scarce thing, not its wafers.

The reason a second source is worth 4 billion dollars

Dylan Patel of SemiAnalysis, speaking at Cerebras Supernova on September 8, explained the mechanism that makes vendor lock a real risk rather than a procurement talking point. Model architectures are tuned to the hardware they were trained on, and the tuning actively penalizes everyone else.

"If you run DeepSeek, for example, on TPUs, the performance is worse, and Trainium the performance is worse. So then you've got this like optimization where doing a more and more sparse mixture-of-experts model, if you get to a certain point, you start actually degrading performance on TPUs and Trainium drastically."

Dylan Patel, September 8, 2026, source

That is the case for the warrant in one paragraph. Amazon and Google have their own accelerators, and every month the open model ecosystem co-designs itself a little harder around Nvidia. The in-house chip needs more custom engineering just to keep pace. You cannot buy that engineering by the wafer. You buy it by giving the designer a six-year reason to put your roadmap first. Palkhiwala said in the same interview that Qualcomm is already engaged with another global hyperscaler on custom chips, on top of the Humain deal in Saudi Arabia and a CPU engagement with Meta. Expect the same structure.

The buyer who did not have to write one

Mark Zuckerberg, in an interview recorded September 3 and published September 8, drew the line that separates Meta from the companies signing warrants.

"The best way to think about Meta is that we are an end-to-end technology company. So even when we were primarily just building social apps, we were never just an app maker, right? We built the data centers, we built the chips, we built the infrastructure."

Mark Zuckerberg, September 3, 2026, source

Except Qualcomm's CFO named Meta as a CPU customer in the same week. End to end has limits, and they are showing up in everyone's supplier list. Meta is running the same play one layer up anyway. Zuckerberg said Muse ships with 100 million free tokens a week and a virtual machine, and that Meta expects to take a very small cut of whatever the transaction is later. Give away compute now, hold a claim on someone else's revenue later. That is the Amazon warrant pointed at consumers.

So what breaks if the orders never arrive?

Not much, mechanically, and that is the elegant part. Vesting tracks purchases, so if Google or Amazon stop buying, the dilution stops with them. The dangerous case is the middle one: enough spending to vest tens of millions of shares at a strike set before the run, so existing holders fund the customer's discount on stock the customer's own orders created. Marvell already gave up more than 10 percent after a beat and a raise in late August, which tells you investors are marking that risk rather than ignoring it.

The counterweight came from an unlikely place. Marc Benioff, asked on September 8 whether the picks and shovels companies would keep the profits, declined to take the other side of the semis trade and then undercut it anyway.

"It's not about just the chip. The chip isn't going to do that for you. The data center isn't going to do that for you. Power isn't going to do that for you."

Marc Benioff, September 8, 2026, source

He is talking his own book, obviously. But the warrants are evidence for him, not against him. When your customer wants equity instead of a lower price, the customer is telling you where it thinks the value ends up, and it is not in the part it is buying.