STMicroelectronics Lands Multibillion-Dollar AWS Chip Deal for AI Data Centres

European Chipmaker Secures Major Cloud Contract

STMicroelectronics has announced a sweeping multi-year, multibillion-dollar commercial agreement with Amazon Web Services, positioning the European semiconductor giant as a strategic supplier for the cloud platform's rapidly expanding AI and computing infrastructure.

The deal, unveiled on the ninth of February twenty twenty-six, will see STMicroelectronics supply AWS with a broad portfolio of advanced chip technologies, including high-bandwidth connectivity solutions, high-performance mixed-signal processors, advanced microcontrollers for intelligent infrastructure management, and analog and power integrated circuits engineered for the energy efficiency demands of hyperscale data centres.

Warrants and Financial Structure

As part of the expanded relationship, STMicroelectronics has issued warrants to AWS for up to twenty-four point eight million ordinary shares at an initial exercise price of twenty-eight dollars and thirty-eight cents. The warrants vest in tranches over the agreement's term, with vesting tied to AWS's purchasing volume of ST products and services. AWS may exercise the warrants over a seven-year window.

STMicroelectronics shares jumped more than six percent following the announcement, with analysts at Morgan Stanley noting the deal strengthens the company's positioning in high-growth data centre silicon.

Strategic Pivot Amid Market Headwinds

The partnership arrives at a critical juncture for STMicroelectronics. The Geneva-based chipmaker reported full-year twenty twenty-five revenues of eleven point eight billion dollars, down over eleven percent year-on-year, as its traditional automotive and industrial markets face continued softness. The company has pushed back its target of reaching twenty billion dollars in annual revenue by three years to twenty thirty.

Data centres represent a key growth vector, with management guiding for data centre revenues to rise from roughly three hundred and fifty million dollars in twenty twenty-five to five hundred million in twenty twenty-six, with a longer-term target of one billion dollars by twenty thirty.

Broader AI Infrastructure Boom

The agreement comes as Amazon accelerates its AI spending dramatically. CEO Andy Jassy recently confirmed plans to spend two hundred billion dollars in twenty twenty-six on data centres, chips, and networking equipment to meet what he described as very high demand for AI workloads. That figure exceeded analyst expectations by more than fifty billion dollars and dwarfs the one hundred and thirty-one billion dollars Amazon spent on property and equipment in twenty twenty-five.

Beyond product supply, the collaboration includes work to optimise electronic design automation workloads in the AWS cloud, enabling accelerated silicon design and faster product development cycles for STMicroelectronics.