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OpenAI Courts Amazon for $10 Billion Investment and AI Chip Partnership

MarketDash Editorial Team
12 hours ago
Sam Altman's OpenAI is negotiating with Amazon for a potential investment exceeding $10 billion and access to the tech giant's AI chips, as the artificial intelligence race intensifies.

Sam Altman's OpenAI is reportedly negotiating with Amazon.com Inc. (AMZN) over a potential investment that could exceed $10 billion, coupled with a deal to use Amazon's artificial intelligence chips. If you're keeping score at home, that's a lot of zeros.

The Information broke the story on Tuesday, with CNBC and Reuters quickly following suit. Neither OpenAI nor Amazon have commented on the reports yet.

Breaking Free From Microsoft's Orbit

The timing here is interesting. OpenAI recently restructured in a way that gives it more flexibility to pursue partnerships beyond its deep relationship with Microsoft (MSFT). Translation: OpenAI wants to diversify its backers and not put all its eggs in the Microsoft basket.

This potential Amazon deal would build on an already massive relationship between the two companies. OpenAI previously signed a $38 billion capacity purchase agreement with Amazon Web Services (AWS), Amazon's cloud computing division. Now they might deepen that partnership with both cash and chips.

Amazon's AI Chess Moves

Amazon isn't exactly new to the AI game. The company has poured over $8 billion into Anthropic, which happens to be one of OpenAI's main rivals. So Amazon is essentially hedging its bets across the AI landscape, which is probably smart given how unpredictable this space has become.

AWS has been developing AI chips since 2015, giving Amazon a strategic advantage in providing the hardware that AI companies desperately need to scale their models. Earlier this month, CEO Andy Jassy revealed that Amazon's Trainium2 AI chip has become "a multi-billion-dollar revenue run-rate business," with over a million chips in production and more than 100,000 companies using it.

The Valuation Game

OpenAI's financial trajectory has been nothing short of remarkable. The company recently closed a $6.6 billion secondary share sale that valued it at $500 billion. Its infrastructure commitments have ballooned past $1.4 trillion, underscoring just how much capital it takes to stay competitive in the AI arms race.

The ChatGPT maker's ability to attract massive funding from tech giants like Microsoft and potentially Amazon reinforces its central position in the AI ecosystem. But competition is fierce. Google's Gemini series has gained serious traction, reportedly putting OpenAI into "code red" mode to accelerate improvements to its own models.

When you're trying to build the future of artificial intelligence, apparently $10 billion partnerships are just another Tuesday.

Back to News

OpenAI Courts Amazon for $10 Billion Investment and AI Chip Partnership

MarketDash Editorial Team
12 hours ago
Sam Altman's OpenAI is negotiating with Amazon for a potential investment exceeding $10 billion and access to the tech giant's AI chips, as the artificial intelligence race intensifies.

Sam Altman's OpenAI is reportedly negotiating with Amazon.com Inc. (AMZN) over a potential investment that could exceed $10 billion, coupled with a deal to use Amazon's artificial intelligence chips. If you're keeping score at home, that's a lot of zeros.

The Information broke the story on Tuesday, with CNBC and Reuters quickly following suit. Neither OpenAI nor Amazon have commented on the reports yet.

Breaking Free From Microsoft's Orbit

The timing here is interesting. OpenAI recently restructured in a way that gives it more flexibility to pursue partnerships beyond its deep relationship with Microsoft (MSFT). Translation: OpenAI wants to diversify its backers and not put all its eggs in the Microsoft basket.

This potential Amazon deal would build on an already massive relationship between the two companies. OpenAI previously signed a $38 billion capacity purchase agreement with Amazon Web Services (AWS), Amazon's cloud computing division. Now they might deepen that partnership with both cash and chips.

Amazon's AI Chess Moves

Amazon isn't exactly new to the AI game. The company has poured over $8 billion into Anthropic, which happens to be one of OpenAI's main rivals. So Amazon is essentially hedging its bets across the AI landscape, which is probably smart given how unpredictable this space has become.

AWS has been developing AI chips since 2015, giving Amazon a strategic advantage in providing the hardware that AI companies desperately need to scale their models. Earlier this month, CEO Andy Jassy revealed that Amazon's Trainium2 AI chip has become "a multi-billion-dollar revenue run-rate business," with over a million chips in production and more than 100,000 companies using it.

The Valuation Game

OpenAI's financial trajectory has been nothing short of remarkable. The company recently closed a $6.6 billion secondary share sale that valued it at $500 billion. Its infrastructure commitments have ballooned past $1.4 trillion, underscoring just how much capital it takes to stay competitive in the AI arms race.

The ChatGPT maker's ability to attract massive funding from tech giants like Microsoft and potentially Amazon reinforces its central position in the AI ecosystem. But competition is fierce. Google's Gemini series has gained serious traction, reportedly putting OpenAI into "code red" mode to accelerate improvements to its own models.

When you're trying to build the future of artificial intelligence, apparently $10 billion partnerships are just another Tuesday.