Amazon Secures Strategic Semiconductor Supply and Stake in STMicroelectronics

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In a significant move to bolster its cloud infrastructure, Amazon Web Services (AWS) has entered into a multi-year, multi-billion dollar supply agreement with European chipmaker STMicroelectronics. The deal, announced Monday, includes a notable equity component, granting AWS warrants for up to 2.7% of the semiconductor firm's shares.

This partnership is a key element of Amazon's broader, aggressive capital expenditure strategy. The company recently revealed plans to invest approximately $200 billion in 2026, a figure that substantially exceeds the $146 billion anticipated by market analysts.

The agreement guarantees AWS a supply of specialized semiconductors for its data centers. In a strategic twist, Amazon will also receive options on as many as 24.8 million STMicroelectronics shares.

Key financial details of the arrangement include:

• A supply contract valued in the billions of dollars over several years.
• Warrants with an exercise price of $28.38 per share.
• A seven-year window to exercise the options.
• A vesting schedule for the warrants tied directly to the volume of orders AWS places with the chip manufacturer.

Supply Scope and Collaborative Aims

STMicroelectronics, an Italian-French semiconductor leader, will provide AWS with several critical product categories. These encompass high-speed connectivity chips, powerful mixed-signal processors, advanced microcontrollers for infrastructure management, and analog and power integrated circuits designed for energy optimization in large-scale data centers.

Beyond the supply relationship, the two companies intend to collaborate on cloud-based optimization for chip design software. The joint goal is to accelerate development cycles and bring new semiconductors to market more rapidly.

Jean-Marc Chery, Chief Executive Officer of STMicroelectronics, framed the partnership as a validation of the company's "innovation capabilities, proprietary technology portfolio, and proven large-scale manufacturing capacity."

Context: Amazon's Infrastructure and AI Push

This deal aligns with a period of massive infrastructure expansion at Amazon. On February 5, the company presented its quarterly results and surprised investors by announcing its intent to deploy around $200 billion in investments for 2026.

AWS itself is experiencing robust growth. In the fourth quarter of 2025, the cloud division's revenue reached $35.58 billion, marking a 24% year-over-year increase. CEO Andy Jassy highlighted this as the unit's fastest growth in 13 quarters.

Furthermore, Amazon's custom silicon business, featuring its Trainium and Graviton processors, has now achieved an annualized revenue run rate exceeding $10 billion, with growth rates in the triple digits.

Market Reaction and Sector Trend

Amazon's stock has faced selling pressure since the disclosure of its substantial investment blueprint. On February 6, shares fell roughly 8%. The stock currently trades around $208 to $209, approximately 15% below its 52-week high of $258.60.

Other technology giants have similarly signaled major spending plans. Alphabet, for instance, has indicated it may invest up to $185 billion in 2026. Investors are reacting nervously to these significant capital commitments, prompting a broad reassessment of valuations across the technology sector.

The STMicroelectronics partnership demonstrates how AWS is working to diversify and secure its semiconductor supply chain. Amid soaring demand for AI and cloud infrastructure, Amazon is thereby gaining greater control over a critical component of its operations.

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