As the startup continues to form significant alliances to obtain processing capacity, OpenAI has inked a $38 billion deal with Amazon to utilize its cloud computing infrastructure. The ChatGPT manufacturer inked agreements for over $1 trillion with Oracle, Broadcom, AMD, and the massive chip manufacturer Nvidia in 2025. Its most recent agreement lessens its dependence on Microsoft.
OpenAI will have access to Nvidia graphics processors to train its AI models as part of the seven-year deal. The agreement comes after OpenAI underwent a comprehensive reorganization last week, moving away from non-profit status and altering its partnership with Microsoft to provide OpenAI greater operational and financial autonomy.
Sam Altman, CEO and co-founder of OpenAI, stated, “Scaling frontier AI requires massive, reliable compute.” Altman added “Our partnership with AWS [Amazon Web Services] strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”
The agreement illustrates both OpenAI’s haste to obtain the power it requires and the enormous demand for computer power resulting from the increased interest in AI. With the introduction of ChatGPT in 2022, OpenAI introduced AI to the general public, but for years it was dependent on Microsoft for processing power. Before their partnership loosened in January of this year, the two companies had an exclusive cloud deal.
The AI startup’s initial contract with Amazon’s AWS represents its most recent move away from Microsoft and toward a variety of processing power sources. According to Kim Forrest, chief investment officer of Bokeh Capital Partners, “the deal with AWS shows that OpenAI considers that its path to leadership is paved with getting access to as much computing power as it can get its hands on.”
Growing Revenue Fast
Microsoft’s “taking less of a control stake in the company has allowed relationships with near competitors to OpenAI’s funders possible,” she stated. However, because it invests a lot of money to advance AI technology, OpenAI has not been successful. OpenAI lost $12 billion in just the most recent quarter, according to Microsoft’s quarterly earnings released last week.
AWS is “uniquely positioned to support OpenAI’s vast AI workloads,” according to a statement from AWS CEO Matt Garman. Prominent AI companies have begun making investments in each other, resulting in a complex web of transactions that has drawn attention. The hub of such web is OpenAI.
Furthermore, there has been some conjecture that an AI bubble might be imminent in response to OpenAI’s acquisition binge. “Yes, the investment loans are unprecedented,” Sam Altman remarked in an interview with the BBC last month, but he also noted that “it’s also unprecedented for companies to be growing revenue this fast.”