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OpenAI is in advanced discussions with Amazon regarding a strategic investment that could exceed $10 billion, alongside a broader agreement to leverage Amazon’s proprietary artificial intelligence chips, according to people familiar with the matter. While the final structure and valuation are still being negotiated, the talks highlight a significant evolution in OpenAI’s funding strategy and its approach to securing long term computing power.

The potential deal, first reported by The Information and later confirmed by CNBC, remains fluid and confidential. However, its scale would place it among the largest private investments ever made in the artificial intelligence sector.

Why This Deal Matters for OpenAI

The discussions come shortly after OpenAI completed a major corporate restructuring in October, a move that materially expanded its strategic flexibility. The revised structure reduced certain exclusivity constraints and formally clarified the terms of its long standing partnership with Microsoft.

Microsoft has invested more than $13 billion into OpenAI since 2019 and has played a central role in its rise. However, following the restructuring, Microsoft no longer holds a right of first refusal to serve as OpenAI’s exclusive compute provider. This change allows OpenAI to raise capital from additional partners and diversify its infrastructure relationships across the broader AI ecosystem.

As demand for large scale model training and inference continues to surge, access to reliable and cost effective compute has become just as critical as capital itself.

Amazon’s Strategic Positioning in AI

For Amazon, a potential investment in OpenAI would represent a meaningful expansion of its exposure to generative AI beyond its existing bets. The company has already committed at least $8 billion to Anthropic, one of OpenAI’s most prominent competitors, positioning Amazon Web Services as Anthropic’s primary cloud provider.

A deal with OpenAI would signal Amazon’s willingness to support multiple leading AI labs simultaneously, similar to Microsoft’s recent move. Last month, Microsoft announced plans to invest up to $5 billion in Anthropic, while Nvidia has committed as much as $10 billion to the same company through a combination of equity and infrastructure support.

This multi partner approach reflects the growing recognition that no single AI developer is likely to dominate the entire market.

The Role of Custom AI Chips

A central component of the OpenAI Amazon discussions involves the use of Amazon’s in house AI chips, an area where AWS has been investing for nearly a decade. Amazon began designing custom silicon around 2015 to reduce reliance on third party chipmakers and improve performance for specialized workloads.

AWS introduced Inferentia chips in 2018 to optimize inference workloads and unveiled the latest generation of its Trainium chips earlier this month, designed specifically for training large scale machine learning models. These chips are increasingly important as companies seek alternatives to Nvidia’s GPUs, which remain in high demand and often constrained in supply.

For OpenAI, access to Amazon’s custom silicon could help lower costs, diversify hardware dependencies, and support the training of next generation models at unprecedented scale.

Massive Infrastructure Commitments Across the Industry

OpenAI has aggressively expanded its infrastructure footprint in recent months. The company has disclosed more than $1.4 trillion in long term infrastructure commitments, including agreements with Nvidia, Advanced Micro Devices, and Broadcom to secure future chip capacity.

In a notable shift, OpenAI also signed its first major contract with Amazon Web Services last month, agreeing to purchase approximately $38 billion worth of cloud capacity. AWS remains the global leader in cloud infrastructure by market share, and the agreement marked a significant step in OpenAI’s move away from reliance on a single provider.

These investments underscore the enormous capital intensity of modern AI development, where training costs for frontier models can run into the tens of billions of dollars.

Valuation and Market Implications

In October, OpenAI finalized a $6.6 billion secondary share sale that allowed current and former employees to sell stock at a reported valuation of $500 billion. The transaction placed OpenAI among the most valuable private companies in the world, rivaling major publicly traded technology firms.

A new investment from Amazon at or above the $10 billion level would further reinforce OpenAI’s position as the central force in the generative AI market, while also reshaping competitive dynamics among cloud providers, chipmakers, and AI developers.

What Comes Next

While no agreement has been finalized, the talks between OpenAI and Amazon reflect a broader industry trend toward deep, multi layer partnerships that combine capital, compute, and custom hardware. As AI systems become more powerful and more expensive to build, these alliances are likely to define the next phase of competition in the technology sector.

If completed, the deal would mark one of the most consequential collaborations yet between a leading AI lab and a global cloud and infrastructure powerhouse, with ripple effects across the entire artificial intelligence industry.