OpenAI and Amazon have signed a 38 billion deal that enables the ChatGPT maker to run its Artificial Intelligence systems on Amazon data centers in the United States. Under the partnership OpenAI will be able to power its tools using “hundreds of thousands” of Nvidia specialized chips through Amazon Web Services. The announcement sent Amazon shares up more than 4 percent.
Amazon said OpenAI will “immediately start utilizing AWS compute as part of this partnership, with all capacity targeted to be deployed before the end of 2026, and the ability to expand further into 2027 and beyond.” The deal follows a recent change in OpenAI’s relationship with longtime backer Microsoft, which until early this year was the startup’s exclusive cloud provider. California and Delaware regulators also recently approved OpenAI’s plan to form a new business structure to raise capital and pursue profitability.
OpenAI has signaled a need for large amounts of computing capacity to develop new systems and support existing products used by hundreds of millions of users. The company has made more than $1 trillion worth of financial obligations for AI infrastructure, including data center projects with Oracle and SoftBank and semiconductor supply deals with Nvidia, AMD, and Broadcom. Some investors have expressed concern about the “circular” nature of those deals since OpenAI is not yet profitable and relies on future returns to meet infrastructure costs.
OpenAI CEO Sam Altman dismissed such doubts, saying “Revenue is growing steeply. We are taking a forward bet that it’s going to continue to grow.” Amazon noted in its statement that “the rapid advancement of Artificial Intelligence technology has created unprecedented demand for computing power.” The article also notes Amazon is already the primary cloud provider to rival Anthropic and has announced plans to cut about 14,000 corporate jobs, roughly 4 percent of its corporate workforce, as it shifts toward Artificial Intelligence initiatives.
