OpenAI eyes $10 billion investment from Amazon

"Amazon is reportedly considering an investment of around $10 billion in OpenAI. According to Reuters sources, the talks are "very fluid," but could value the ChatGPT maker at more than $500 billion. The potential investment builds on a previously agreed deal in which OpenAI purchases $38 billion worth of cloud services from Amazon Web Services (AWS). That agreement, which runs until 2032, gives OpenAI access to Amazon EC2 UltraServers with hundreds of thousands of Nvidia chips."

"However, OpenAI is considering using Amazon's Trainium chips for its workloads, The Information first reported. Every AI player is trying to break free from its dependence on Nvidia, with Google currently holding the best cards with its TPUs as an alternative to GPUs for AI hardware. Amazon's Arm-based processors have become increasingly relevant since the acquisition of Annapurna Labs in 2015. As Trainium3 and Inferentia demonstrate, Amazon can use such chips to optimize very specifically for GenAI workloads."

"OpenAI has expanded its infrastructure partners in recent months. In addition to Microsoft, which has been its primary cloud provider for many years, the company also relies on Google Cloud and Oracle. CoreWeave also provides infrastructure as a so-called 'neocloud', almost entirely focused on AI. The strategy is clear: reduce dependence on a single supplier and benefit from any surprising advances made by a particular chip manufacturer."

Amazon may invest roughly $10 billion in OpenAI, potentially valuing the company above $500 billion and building on a $38 billion AWS cloud purchase agreement through 2032 that provides EC2 UltraServers with hundreds of thousands of Nvidia chips. OpenAI is considering using Amazon Trainium chips to run workloads while the broader industry seeks alternatives to Nvidia, with Google TPUs as a leading option. Amazon's Arm-based processors gained relevance after the Annapurna Labs acquisition, and Trainium3 and Inferentia target GenAI optimization. OpenAI has added Google Cloud, Oracle and CoreWeave to reduce single-supplier dependence; Microsoft retains a 27% stake and exclusive sales rights.

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