Chalk up another in the seemingly endless string of artificial-intelligence chip deals. Qualcomm has signed up Amazon.com as a customer for its processors but the size and structure of the deal shows it's still far from being a major threat to Nvidia.

Nvidia shares were down 0.6% at $224.55 in Wednesday's premarket. That was adding to a 2% fall the previous day.

Some shareholders might be concerned that Qualcomm's announcement Tuesday that it would provide work on custom chips with Amazon will eat into Nvidia's business with the e-commerce giant. But it's worth taking a closer look at the deal.

Firstly, take the size. The headline figure for the Qualcomm-Amazon deal was for up to $60 billion in potential purchases but the timeline is spread out over a decade. Qualcomm maintained its forecast for achieving $15 billion in data-center revenue in fiscal 2029, whereas Nvidia reported $89 billion in data-center revenue in its latest quarter alone.

Secondly, look at the terms of the arrangement. Qualcomm has issued Amazon a warrant to acquire as many as 25 million shares of the chip company, tied to purchases of Qualcomm's products and services.

Such a warrant is hardly unprecedented. Advanced Micro Devices has similar stock-warrant arrangements with its chip customers Meta Platforms and OpenAI. But it underlines the imbalance in negotiating power-Nvidia didn't give up any equity in exchange for Amazon's recent commitment to purchase an additional two million Nvidia chips over the next two years.

Additionally, Qualcomm and Amazon said their work would center on AI inference-generating output from AI models-rather than Nvidia's core strength of AI training.

"Inference rewards power efficiency over peak performance. That is Qualcomm's home turf. This is a wedge into Nvidia's margin, not a frontal assault on training," said Daniel Newman, CEO of technology research firm Futurum Group.

Contenders will keep coming for Nvidia's AI chip market but that doesn't mean it will give up the crown any time soon.