Amazon's AWS cloud computing division already designs several chips for use in its data centers and has hired Intel to package at least one version.

Intel’s partnership with AWS is part of the chipmaker’s attempt to play catch-up. The new deal, along with a $3 billion grant from the US government to boost domestic chip making and make chips for the US military, “demonstrates the continued progress we are making to build a world-class foundry business,” Intel said in the statement.

Intel stock rose after news of its chip deal with Amazon but the semiconductor company still needs to convince on execution and bringing in more customers.