Amazon plans $10bn OpenAI investment as ChatGPT maker targets $500bn valuation
Amazon is reportedly in talks to invest up to $10 billion in OpenAI, the artificial intelligence company behind ChatGPT, in a move that could value the business by more than $500 billion and intensify competition in the global AI market.
The negotiations, which were first reported by The Information and confirmed by multiple sources, are said to be in critical condition and in the water. News of the potential deal sent Amazon shares up nearly 0.6 percent, reflecting investor confidence in the deepening relationship between the world’s largest cloud provider and one of the most influential AI developers.
As part of the proposed investment, OpenAI is expected to increase its use of Amazon Trainium AI accelerator chips, designed to compete with Nvidia’s flagship processors and similar offerings from Google. This deal could also be the basis for a fundraising round that includes additional investors.
The talks come as OpenAI is exploring long-term capital options, including a possible public offering that could value the company at up to $1 trillion. The rapid rise of productive AI has driven incredible demand for computing power, placing cloud infrastructure providers such as Amazon Web Services (AWS) at the center of the technology’s growth.
Amazon and OpenAI already have a great commercial relationship. Last month, OpenAI agreed to a $38 billion deal to buy cloud services from AWS, primarily to run its AI operations using Nvidia chips. The companies described the agreement as a strategic partnership designed to support the rapidly growing computing needs of OpenAI.
OpenAI has also reached a series of other landmark infrastructure agreements. In September, it announced an agreement with Nvidia to build and operate at least 10 gigawatts of AI data centers, with Nvidia committing to invest up to $100 billion as capacity is built. Separately, OpenAI has a cloud partnership with Oracle that could be worth an estimated $300 billion over time.
Founded in 2015 as a non-profit research organization, OpenAI rose to global prominence following the launch of ChatGPT in 2022, which helped bring artificial intelligence into mainstream use. Earlier this year, the company completed a major restructuring that turned it into a non-profit organization. The new framework, overseen by a non-profit organization with a funding stake, was designed to remove barriers to OpenAI’s ability to raise capital and secure the massive computing resources needed to train and run advanced AI models.
For Amazon, OpenAI’s significant equity will strengthen its position in the raging battle for AI leadership, while helping drive adoption of its in-house Trainium chips and AWS infrastructure. Once completed, the deal will mark one of the largest strategic investments to date in the AI manufacturing sector and underscore how artificial intelligence has become the future of global technology and cloud computing.
