Amazon Eyes $10 Billion OpenAI Investment in Major AI Deal
▼ Summary
– Amazon is in early talks to invest up to $10 billion in OpenAI, which would involve OpenAI using Amazon’s AI chips.
– This potential deal would value OpenAI at over $500 billion, according to a Bloomberg report.
– Amazon is diversifying its AI investments, having already partnered with and invested $8 billion in Anthropic, a rival to OpenAI.
– The discussions follow OpenAI’s transition to a for-profit model, giving it more freedom to seek investors beyond Microsoft.
– Such a deal exemplifies circular AI industry agreements, where tech giants invest in AI firms that then commit to using their hardware and cloud services.
The technology sector is buzzing with reports that Amazon is in preliminary talks to invest up to $10 billion in OpenAI, a move that would significantly reshape the competitive landscape of artificial intelligence. According to CNBC, a key component of the potential agreement involves OpenAI utilizing Amazon’s proprietary AI chips. Should the deal proceed, Bloomberg notes it could value the AI research lab at an extraordinary figure exceeding $500 billion, based on information from an unnamed source.
This strategic maneuver represents Amazon’s latest effort to broaden its influence in the fiercely competitive AI arena. The company has already made a substantial $8 billion commitment to Anthropic, a direct competitor to OpenAI. Furthermore, Amazon recently showcased the newest version of its Trainium AI chips and announced plans for the next generation, strengthening its comprehensive cloud and hardware ecosystem through Amazon Web Services (AWS).
The timing of these discussions follows OpenAI’s recent structural shift to a for-profit business model. This change grants the company greater flexibility to engage with investors beyond Microsoft, its early and significant backer which holds a 27% stake. An Amazon investment would underscore a growing trend of interconnected partnerships within the industry, where major cloud and hardware providers form alliances with innovative AI firms.
These relationships often create a symbiotic cycle: the tech giants secure deals to supply their products, while the AI startups commit to using those specific data centers and semiconductor chips for training their complex models. A clear example occurred in March, when OpenAI allocated $350 million in equity to CoreWeave. That company then used the capital to purchase chips from Nvidia, which in turn provided the computing power back to OpenAI. This arrangement boosted CoreWeave’s revenue and consequently increased the value of OpenAI’s own investment.
The pattern of strategic alliances continued throughout the year. In October, OpenAI entered into an agreement to acquire a 10% stake in AMD, committing to use its AI graphics processing units. That same month, it also finalized a chip usage agreement with Broadcom. Most recently, in November, the creator of ChatGPT signed a massive $38 billion cloud computing agreement with Amazon itself, setting the stage for the current investment discussions.
Both Amazon and OpenAI have declined to comment on the reported negotiations.
(Source: TechCrunch)
