In a major shift in the AI landscape, OpenAI, the company behind the viral chatbot ChatGPT, has inked a colossal $38 billion (€33bn) deal with Amazon Web Services (AWS). This agreement grants OpenAI access to a vast network of specialized AI chips – “hundreds of thousands” of Nvidia’s processors – housed within Amazon’s US data centers.
The announcement sent ripples through the market, boosting Amazon shares by 4%. This strategic move comes just days after OpenAI severed its exclusive cloud computing partnership with long-time backer Microsoft and received regulatory approval to transition from a non-profit organization into a for-profit entity.
This monumental agreement underscores the explosive demand for computing power driving the rapid evolution of AI. OpenAI has openly acknowledged its need for significantly more infrastructure to fuel both the development of new AI systems and maintain the performance of existing products like ChatGPT, which boasts hundreds of millions of users worldwide.
The partnership signifies a significant investment by Amazon in the burgeoning AI sector. The company emphasizes that OpenAI will begin utilizing AWS compute resources immediately, with full deployment anticipated by the end of 2026. There’s even potential for expansion into 2027 and beyond.
OpenAI has been aggressively pursuing infrastructure deals across multiple fronts, committing billions to partnerships with Oracle, SoftBank, Nvidia, AMD, and Broadcom. These commitments, however, have sparked investor concerns about a potentially “circular” dependency. With OpenAI currently operating at a loss, questions linger about its ability to sustain these significant expenditures without jeopardizing long-term financial stability.
OpenAI CEO Sam Altman attempted to quell these anxieties last week, characterizing them as premature speculation during an appearance alongside Microsoft CEO Satya Nadella. He underscored the company’s rapid revenue growth and expressed confidence in its continued trajectory.
While Amazon is already the primary cloud provider for OpenAI competitor Anthropic (developer of the Claude chatbot), this new partnership positions AWS as a pivotal player in OpenAI’s ambitious future plans, underscoring the escalating competition within the rapidly evolving world of artificial intelligence.
