By Aimee Look and Billy Gray
STMicroelectronics shares rose after the company clinched a multibillion-dollar deal with Amazon.com's cloud-computing arm, marking a major foray for the European chip maker in supplying chips for artificial-intelligence infrastructure.
Milan-listed shares in STMicroelectronics were up 5.5% in European morning trading.
Four U.S. tech giants--Amazon, Microsoft, Meta Platforms and Alphabet--last week touted plans to pour a combined $670 billion this year into building AI infrastructure. STMicroelectronics--which counts Apple and Tesla among its customers--is poised to snag a slice of Amazon's spend, as the group tussles to get in on the AI boom.
STMicroelectronics said Monday that it entered into a multiyear, multibillion-dollar agreement with Amazon Web Services that expands the relationship between the two companies. The deal establishes the chip maker as a supplier of semiconductor technologies and products for AWS's data centers, while giving the cloud giant the option to buy a stake of up to 2.7% in STMicroelectronics.
AWS will have the option to purchase up to 24.8 million ordinary shares in STMicroelectronics, to vest in tranches over a seven-year period with the initial price of $28.38. STMicroelectronics' stock closed at $29.85 in New York on Friday.
"This collaboration positions us ideally for further scale-up across multiple market segments, from data center infrastructure to AI connectivity, positioning ST at the center of the AI revolution," the company said.
STMicroelectronics has traditionally relied on legacy semiconductor fields, like auto, for most of its sales. But waning demand prompted STMicroelectronics to cut guidance several times and slash jobs in recent years. In late January, the group reported an uptick in chip sales for areas like personal electronics and industrial machinery, but flagged lower demand for semiconductors in the automotive industry--a spillover effect from weak car demand.
Amazon itself is building a handful of data centers for Anthropic, which will use more than one million of Amazon's Trainium chips. AWS last year released its own chips, which it claims are faster and more energy efficient than Nvidia's equivalent.
Write to Aimee Look at aimee.look@wsj.com and Billy Gray at william.gray@wsj.com
(END) Dow Jones Newswires
02-09-26 0451ET
