The potential deal would see the ChatGPT maker adopt Amazon's Trainium chips as the e-commerce giant seeks to expand its AI footprint.
OpenAI is in preliminary discussions with Amazon about a potential investment that could exceed $10 billion, marking a significant new chapter in the rapidly shifting landscape of artificial intelligence partnerships.
The deal under discussion could value OpenAI north of $500 billion and see it adopt Amazon's Trainium chip. The negotiations, first reported by The Information on Tuesday, come after OpenAI completed a restructuring in October and formally outlined the details of its partnership with Microsoft, giving it more freedom to raise capital and partner with companies across the broader AI ecosystem.
The talks between Amazon and the ChatGPT maker are fluid, and details are subject to change, adding that Amazon could invest $10 billion or more, or nothing at all.
Amazon's Dual AI Strategy
The potential investment would represent a notable strategic pivot for Amazon, which has already committed $8 billion to OpenAI rival Anthropic. Amazon remains a minority investor in Anthropic, the San Francisco-based company behind the Claude chatbot and AI models founded by former OpenAI research executives.
Amazon Web Services has been designing its own AI chips since around 2015, and the hardware has become crucial for AI companies that are trying to train models and meet growing demand for compute. AWS announced its Inferentia chips in 2018, and the latest generation of its Trainium chips earlier this month.
The discussions reportedly began around October, coinciding with OpenAI's lengthy corporate overhaul that ended with Microsoft owning 27% of the business.
A More Independent OpenAI
Microsoft held a 32.5 percent stake on an as-converted basis in OpenAI for-profit before recent funding rounds diluted that position. Under the restructured partnership announced in October, Microsoft will no longer have the right of first refusal to be OpenAI's compute provider. OpenAI can now also develop some products with third parties.
This newfound flexibility has allowed OpenAI to pursue relationships with other major cloud providers. Last month, OpenAI signed a deal to buy $38 billion worth of capacity from AWS, its first contract with the cloud infrastructure leader.
Insatiable Appetite for Compute
The potential Amazon investment underscores OpenAI's voracious need for capital to fund its compute-intensive operations. The artificial intelligence company seeks fresh capital to fund its rapidly rising computing costs.
OpenAI has made more than $1.4 trillion of infrastructure commitments in recent months, including agreements with chipmakers Nvidia, Advanced Micro Devices, and Broadcom. These commitments are part of the broader Stargate initiative, a new company which intends to invest $500 billion over the next four years, building new AI infrastructure for OpenAI in the United States.
OpenAI, Oracle, and SoftBank are developing data center sites that bring Stargate to nearly 7 gigawatts of planned capacity and over $400 billion in investment over the next three years.
The Stakes for Amazon
For Amazon, a successful investment would represent a significant victory for its fledgling semiconductor division. Amazon says Trainium gives cheaper and more efficient compute than Nvidia's GPUs for the heavy math behind large models.
Dave Brown from AWS told reporters that "As we get into early next year, we'll start to scale out very, very quickly," referring to the company's latest Trainium3 accelerator.
Yet some analysts have expressed caution. Analysts warn about a bubble because some companies invest in customers only to push those customers to buy more of their own products. It becomes a loop.
The potential deal comes at a time when OpenAI is laying the groundwork for an initial public offering that could value the company at up to $1 trillion.
In October, OpenAI finalized a secondary share sale totaling $6.6 billion, allowing current and former employees to sell stock at a $500 billion valuation.
Neither OpenAI nor Amazon has commented publicly on the discussions. With talks at a preliminary stage, the terms (and indeed whether any deal materializes) remain uncertain. But if successful, the partnership would further cement OpenAI's position as the dominant player in an industry that shows no signs of slowing down.
