Potential US$10 billion deal could reshape cloud power balance and OpenAI's funding runway
Amazon is circling a blockbuster OpenAI deal that could top US$10bn and value the ChatGPT maker at more than US$500bn, according to multiple media reports, putting another mega-sized marker down in the AI infrastructure race.
According to Reuters, Amazon.com Inc. is in talks to invest about US$10bn in OpenAI in a potential transaction that would value the firm above US$500bn, with negotiations described as “very fluid” and confidential.
Bloomberg reports that OpenAI is in initial discussions to raise at least US$10bn from Amazon in a deal that could value the company “north of US$500bn” and see it adopt Amazon’s Trainium chips.
CNBC also reports that the investment could exceed US$10bn, citing a person familiar with the talks.
The talks go straight to the heart of AI compute and cloud economics.
Reuters said the potential deal highlights relentless demand for computing power as companies race to build systems that rival or surpass human intelligence.
CNBC reports that OpenAI has made more than US$1.4tn of infrastructure commitments in recent months, including agreements with Nvidia, Advanced Micro Devices and Broadcom.
OpenAI has already signed a deal to buy US$38bn of cloud capacity from Amazon Web Services, its first major contract with the cloud leader.
On the strategic side, the move would build on Amazon’s in-house AI hardware push.
CNBC reports that Amazon Web Services has been designing its own AI chips since around 2015, launched its Inferentia chips in 2018 and unveiled the latest generation of its Trainium chips earlier this month.
As per The Information, OpenAI plans to use Amazon’s Trainium chips, which compete with Nvidia and Google chips, and Amazon’s financing could trigger a broader fundraising round with other investors.
The talks come after OpenAI reshaped its capital structure.
CNBC reports that the company completed a restructuring in October and formally detailed its partnership with Microsoft, giving it more freedom to raise capital and partner across the AI ecosystem.
According to Reuters, the Microsoft deal turned OpenAI into a public benefit corporation controlled by a non-profit that holds a stake in its financial success, easing earlier constraints on fundraising and access to computing resources.
Microsoft holds a 27 percent stake in OpenAI and has an exclusive right to sell OpenAI models to its cloud customers, while CNBC reports that Microsoft no longer has a right of first refusal to be OpenAI’s compute provider.
Capital continues to crowd into the space.
Microsoft has invested more than US$13bn in OpenAI since 2019, while Amazon has invested at least US$8bn into OpenAI rival Anthropic.
Microsoft plans to invest up to US$5bn into Anthropic and Nvidia intends to invest up to US$10bn in the startup.
In October, OpenAI finalized a US$6.6bn secondary share sale that allowed current and former employees to sell stock at a US$500bn valuation, according to CNBC.
Reuters has reported that OpenAI is laying the groundwork for an eventual initial public offering that could value the company at up to US$1tn.
Negotiations between Amazon and OpenAI remain preliminary and subject to change, according to Reuters, CNBC and Bloomberg, which all cited unnamed sources because the talks are private.
Reuters said OpenAI, Amazon and Microsoft did not immediately respond to its request for comment.
