Qualcomm and Amazon strike AI chip and optical networking deal; Celero raises $275M

As part of the agreement, Qualcomm issued a stock warrant that enables Amazon to buy up to 25 million shares worth $4 billion. The shares will vest in tranches through 2036, and a regulatory filing cited by SiliconANGLE said the issuance of some shares is contingent on Amazon buying up to $60 billion worth of Qualcomm products. Amazon Web Services vice president Prasad Kalyanaraman said: “By working together on customized silicon and advanced connectivity, we’re delivering more performant, efficient, and cost-effective infrastructure for our customers.”

The Amazon deal comes three months after Qualcomm announced a similar multi-generational AI chip contract with Meta Platforms Inc. Meta has agreed to buy several future iterations of Qualcomm’s Dragonfly C1000 central processing unit series, which is optimized for AI servers; the most advanced chips in the series will have more than 250 cores and a top frequency above five gigahertz.

The partnership also covers optical networking. Qualcomm will supply Amazon with SerDes and DSP technologies used to link servers and data centers. A DSP converts data-carrying electrical signals into light for transmission over fiber-optic cables, while a SerDes module consolidates parallel data streams and reduces the power needed to move data. Qualcomm’s most advanced optical DSP, the CO400, can transmit data over distances of up to 12 miles and uses forward error correction to reduce transmission errors.

Qualcomm said it will expand its use of AWS as part of the deal, running electronic design automation applications on Amazon Bedrock to speed up chip development. Amazon has been spending heavily in the same area, including a June agreement to buy billions of dollars of optical hardware from Corning Inc. and an internally designed data center network called RNG.

A day later, SiliconANGLE reported that Celero Communications Inc., an Irvine, California-based startup developing data center networking chips, raised $275 million in Series C funding. The round was led by Alphabet Inc.’s CapitalG, Atreides Management and Valor Equity Partners, with returning investors Sutter Hill Ventures and Maverick Silicon also participating, and values Celero at $3 billion.

Celero is developing a coherent digital signal processor optimized for AI workloads, saying it offers lower latency and uses less power than current chips. The processor is designed for long-haul links between data centers as well as scale-up and scale-out networks inside data centers. Before announcing the funding, Celero said it validated a version of the chip made on Taiwan Semiconductor Manufacturing Co.’s two-nanometer process, which provides 15% better performance than its predecessor, and that the design supports 1.6T and 3.2T interconnects.

“AI infrastructure is rapidly outgrowing the capabilities of traditional optical interconnect architectures,” Celero co-founder and Chief Executive Officer Nariman Yousefi said. “Our 2nm silicon validation demonstrates that coherent technology can deliver the bandwidth density, power efficiency and scalability required for the next generation of AI networks.” Celero said it will use the funding to accelerate product development and manufacturing.