For Amazon, the deal represents a significant endorsement of its cloud computing capabilities
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Amazon’s cloud computing arm has signed a $38bn deal with OpenAI to provide computing power for the company’s artificial intelligence models. The agreement sent Amazon shares higher in early trading.
Under the seven-year arrangement, OpenAI will use Amazon Web Services (AWS) to access hundreds of thousands of Nvidia graphics processing units (GPUs), the companies announced on Monday.
The deal marks another step in OpenAI’s transformation from research lab to a major force in the technology industry. The ChatGPT maker has committed to spending around $1.4tn on infrastructure, including chips and data centres, to build and run its AI systems — a level of investment that has raised concerns about an emerging technology bubble.
For Amazon, the deal represents a significant endorsement of its cloud computing capabilities, as it seeks to reassert itself in the fast-moving AI sector.
“As OpenAI continues to push the boundaries of what’s possible, AWS’s best-in-class infrastructure will serve as a backbone for their AI ambitions,” Matt Garman, chief executive of Amazon Web Services, told Bloomberg.
How Amazon’s Shares Responded
Amazon shares rose 4.5% to $255.29 in early trading in New York on Monday, while Nvidia gained 3.3% to $209.20.
Amazon Web Services remains the world’s largest provider of rented computing power. However, until now, it had stood apart as rivals including Microsoft, Google, and Oracle struck large-scale agreements to host OpenAI’s operations.
OpenAI has also reached major deals with other cloud providers. Microsoft — its largest investor and previous exclusive cloud partner — recently confirmed a $250bn commitment from the AI firm to use its Azure platform. Oracle has agreed a $300bn deal, while Google Cloud is among the companies supporting ChatGPT. OpenAI also signed a $22.4bn agreement with CoreWeave, one of several newer “neo cloud” firms targeting AI developers.
“Adding AWS as a key cloud provider can ease some pressure for OpenAI, especially as it continues to farm out more contracts to neocloud providers like CoreWeave, which operates at a much smaller scale than AWS,” Bloomberg Intelligence analysts Anurag Rana and Andrew Girard wrote last week, predicting the deal. They added that AWS’s global network could help OpenAI expand internationally.
Under the new agreement, OpenAI will begin using AWS computing power immediately, with all capacity expected to be delivered by the end of 2026. The company will also have the option to expand the partnership in future.
