OpenAI has entered a landmark seven-year agreement with Amazon.com worth $38 billion to purchase cloud computing services, marking the ChatGPT creator’s first major initiative following its recent corporate restructuring. According to Reuters, the move is designed to give OpenAI greater operational and financial independence as it accelerates efforts to develop increasingly sophisticated artificial intelligence models.
The deal, announced Monday, provides OpenAI with access to hundreds of thousands of Nvidia graphics processors hosted on Amazon Web Services (AWS). Per Reuters, the arrangement highlights the rapidly growing demand for computing power across the AI industry, as companies compete to build systems capable of performing tasks that approach or even exceed human intelligence. OpenAI CEO Sam Altman has said the company plans to invest $1.4 trillion in developing 30 gigawatts of computing capacity—enough to power roughly 25 million U.S. homes.
For Amazon, the agreement represents a significant endorsement of AWS at a time when some investors had questioned whether the company’s cloud division was falling behind competitors like Microsoft and Google in the AI race. Reuters reported that those concerns were somewhat eased after AWS posted strong results for the September quarter. Following the announcement, Amazon shares hit an all-time high, adding nearly $140 billion to its market capitalization, while Microsoft’s stock briefly dipped.
“Scaling frontier AI requires massive, reliable compute,” said OpenAI co-founder and CEO Sam Altman. “Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”
Related: PayPal Partners With OpenAI to Bring Payments Directly Into ChatGPT
OpenAI will begin using AWS immediately, with full capacity expected to come online by the end of 2026 and potential for further expansion in 2027 and beyond. According to Reuters, Amazon plans to deploy hundreds of thousands of chips, including Nvidia’s GB200 and GB300 AI accelerators, in new data clusters dedicated to powering ChatGPT and training OpenAI’s future models. Amazon already hosts OpenAI models on its Bedrock platform, which allows businesses to access multiple AI systems through AWS.
The restructuring at OpenAI, completed last week, moved the organization further away from its original nonprofit framework. It also eliminated Microsoft’s right of first refusal to supply computing resources, paving the way for new partnerships like the one with Amazon. Reuters has reported that OpenAI may also be preparing for a potential initial public offering that could value the company at as much as $1 trillion.
However, Reuters noted that the surging valuations and massive spending commitments across the AI sector—exceeding $1 trillion for OpenAI alone—have fueled concerns that the industry could be approaching bubble territory. While OpenAI’s longstanding relationship with Microsoft has been central to both firms’ AI dominance since 2019, both are now diversifying their partnerships. OpenAI has already reached cloud agreements with Google and, according to Reuters, secured a separate $300 billion deal with Oracle to purchase computing resources over the next five years.
Source: Reuters
