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Talks Between AI Leaders

OpenAI is in confidential discussions with Amazon about a potential investment that could exceed $10 billion, CNBC confirmed. The deal would also include an agreement for OpenAI to utilize Amazon’s AI chips, strengthening the collaboration between one of the world’s leading AI developers and the cloud computing giant.

The specifics of the agreement are still fluid and subject to change, according to sources familiar with the matter. The discussions follow OpenAI’s October restructuring, which expanded its flexibility to raise capital and collaborate with partners outside its previous arrangement with Microsoft.

Strategic Context

Microsoft has invested over $13 billion in OpenAI since 2019 and remains a major partner, but it no longer holds exclusive rights as OpenAI’s compute provider. This shift allows OpenAI to engage with multiple hardware providers while continuing to develop advanced generative AI technologies.

Amazon’s potential investment could mark a significant step for the company, which has already invested at least $8 billion into OpenAI rival Anthropic. Other industry players are pursuing similar moves: Microsoft recently announced plans to invest up to $5 billion in Anthropic, and Nvidia is committing up to $10 billion to the same startup.

The Role of Amazon’s AI Hardware

AWS has been developing AI chips since 2015, launching its first Inferentia chips in 2018 and most recently rolling out the latest generation of Trainium processors. These chips are designed to meet the high computational demands of large AI models, a critical component for companies like OpenAI that are training ever-larger generative AI systems.

OpenAI has also made over $1.4 trillion in infrastructure commitments in recent months with chipmakers including Nvidia, AMD, and Broadcom. Last month, OpenAI signed its first contract with AWS for $38 billion in cloud capacity, marking a milestone in its hardware partnerships.

Capital and Valuation

In October, OpenAI completed a secondary share sale worth $6.6 billion, enabling current and former employees to sell shares at a $500 billion valuation. The potential Amazon investment would further reinforce OpenAI’s financial position while deepening its technical collaboration with AWS, providing access to cutting-edge AI infrastructure for large-scale model training and deployment.

This move positions Amazon to expand its presence in the rapidly growing generative AI market, while OpenAI gains flexibility and additional compute power to accelerate its product development and maintain a leading edge in AI research and applications.