AWS to power OpenAI’s core AI workloads as both giants seek to strengthen their cloud and AI leadership. Amazon shares soar following the deal.
OpenAI and Amazon Web Services (AWS) have forged a strategic partnership worth $38 billion. This deal will span over the next seven years and is set to power OpenAI’s core workloads, including the capacity to run and scale its revolutionary AI models, such as ChatGPT.
For Amazon, the deal is a major vote of confidence for AWS, the company’s cloud unit, which some analysts feared had fallen behind its competitors. Paolo Pescatore, an analyst at PP Foresight, said
“This is a hugely significant deal (and is) clearly a strong endorsement of AWS compute capabilities to deliver the scale needed to support OpenAI,”
Moreover, Amazon’s ability to roll out these vast resources of tens of thousands of chips will help OpenAI remain at the forefront of generative AI technology. Moreover, OpenAI's CEO, Sam Altman, has been clear about the company's ambitious vision. Altman said
“We are committed to spending $1.4 trillion to develop 30 gigawatts of computing resources, enough to power roughly 25 million U.S. homes”.
This massive investment is a clear signal of OpenAI's commitment to scaling its AI infrastructure and pushing the boundaries of what’s possible with machine learning models. Altman’s vision includes the ambitious goal of adding 1 gigawatt of compute every week, a target that would require over $40 billion in capital for each gigawatt.
Amazon’s Stock Soars After $38 Billion Deal
The announcement also sent shockwaves through the stock market, with Amazon’s shares hitting an all-time high. Following the deal, Amazon’s stock jumped 4%, marking its best two-day performance since November 2022. In contrast, Microsoft’s shares experienced a brief dip, reflecting the evolving dynamics in the cloud and AI space.
The market's response to the partnership highlights the growing importance of AI in the tech world and the critical role that cloud services play in powering this next generation of technological innovation.
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