In a move that underscores the escalating arms race in artificial intelligence, the Amazon STMicro Deal commits Amazon Web Services to purchase several billion dollars’ worth of chips and related services from STMicroelectronics over the course of a new multiyear agreement.
The semiconductor maker announced Monday that the commercial pact deepens its strategic ties with AWS and cements STMicro’s role as a key supplier powering Amazon’s rapidly expanding AI and cloud infrastructure.
Chips at the Heart of the Cloud
Under the agreement, AWS will integrate STMicro’s semiconductor products into its infrastructure stack. The components include chips designed for high-bandwidth connectivity, infrastructure management and improved power efficiency within data centers — the digital factories fueling today’s AI boom.
While STMicro characterized the arrangement as “multiyear” and “multibillion,” it did not disclose additional financial specifics.
Warrants Add an Equity Twist
As part of the deal, STMicro said it issued warrants to AWS covering up to 24.8 million ordinary shares. The warrants vest over time and are largely tied to AWS’ purchases of STMicro products and services.
AWS may exercise the warrants during a seven-year window at an initial exercise price of $28.38 per share, according to the announcement.
The structure offers AWS potential equity upside linked to its spending commitments — a strategic lever that avoids the complexity of a full acquisition while aligning incentives between supplier and customer.
