Amazon announced a strategic partnership with OpenAI on Friday that includes an investment of up to $50 billion, the latest sign of a deepening relationship between the tech giant and the maker of ChatGPT.
As part of the deal, OpenAI will expand its use of Amazon Web Services infrastructure, including committing to deploy 2 gigawatts of its Trainium artificial intelligence chips in a new enterprise platform called Frontier.
“Right now, we have two of the largest AI labs, and they’re both betting big on Trainium,” Amazon CEO Andy Jassy told CNBC’s Andrew Ross Sorkin on Friday.
The agreement marks a significant change for Amazon, which has had a strong relationship with OpenAI’s main rival, Anthropic.
Amazon has poured billions of dollars into Anthropic since 2023, setting up an $11 billion data center campus for the company in Indiana called Project Rainier.
The company also relies in part on Anthropic’s Claude model for some of its AI products, including Rufus, a shopping assistant, and Alexa+, an improved version of its digital assistant.
Jassy told CNBC on Friday that the OpenAI deal does not change his relationship with Anthropic.
“(Anthropic) has always had multiple partners, and so have we,” Jassy said. “So that relationship remains strong, and we’re really excited about the long-term partnership we’re building with OpenAI.”
Amazon and OpenAI also agreed to have Amazon’s engineering teams jointly develop “customized models” to power consumer products.
OpenAI plans to invest $100 billion in AWS over the next eight years, expanding on an existing $38 billion deal signed last November.
This partnership was announced alongside OpenAI’s broader $110 billion funding round. The funding round also includes $30 billion from Nvidia and $30 billion from Nvidia. Softbank.
The deal continues OpenAI’s trend of diversifying beyond its long-standing partnerships. microsoftAmazon’s biggest cloud computing rival. Microsoft first backed OpenAI in 2019, pledging to invest more than $13 billion in the startup. Microsoft also invested $5 billion in Anthropic last November.
OpenAI and Microsoft said in a joint statement Friday that their partnership remains “strong and central.”
“Microsoft will maintain exclusive licenses and access to intellectual property across OpenAI models and products,” the companies wrote. “Collaborations like the OpenAI and Amazon partnership are always on the table under our agreements, and Microsoft is excited to see what they build together.”
detail
Amazon’s huge investment in OpenAI comes with several conditions. The companies said Amazon will start with an initial commitment of $15 billion, followed by an additional $35 billion “in the coming months.”
The second tranche is contingent on OpenAI reaching certain unspecified milestones and the company completing an “initial public offering or direct listing of its shares” in the United States, according to a regulatory filing.
If Amazon does not invest the $35 billion by Dec. 31, 2028, the parties’ obligations under the agreement will end, but “the date may be moved earlier under certain circumstances,” the filing states.
One milestone may be that OpenAI needs to reach artificial general intelligence in order to receive $35 billion from Amazon, The Information reported earlier this week, citing people familiar with the matter. Amazon declined to comment on the report.
AGI refers to AI that can perform at least as well as humans in most tasks.
This strategic partnership represents a major win for AWS, which competes with Microsoft. google and oracle For highly profitable AI trading for cloud services.
It may also help ease Wall Street’s concerns about this year’s hefty $200 billion capital spending forecast. The bulk of the spending is expected to go toward AI-related initiatives such as data centers, chips and networking equipment.
Amazon’s stock fell for nine straight days after the company’s earnings were released on February 5th, wiping out more than $450 billion from its market capitalization. Shares closed 1% higher on Friday.
William Blair analysts said in a note Friday that the OpenAI deal “continues to undermine the bearish narrative” as AWS currently has major partnerships with two major AI labs, both of which use the company’s custom silicon.
“This puts last quarter’s announcement of $200 billion in capital spending into context, as AWS rapidly expands to support this new large customer, in addition to its expansion with Anthropic and others,” the analysts wrote. “This probably means AWS growth will accelerate further.”
Andrew Graham, managing partner at asset management firm Jackson Square Capital, told CNBC in an email that the Trainium effort “signals Amazon to becoming a bigger player in the custom silicon space.”
This puts Amazon in “direct competition” with other custom silicon manufacturers, including: broadcom And similar to Google, Graham added, it could threaten Nvidia’s chip dominance.
AI enhancement
Amazon is struggling to compete in an increasingly crowded market for AI consumer and business applications where other companies such as Google, Anthropic, OpenAI and Microsoft have had a head start.
The company released its own base model called Nova in December 2024.
Late last year, Amazon reorganized its artificial general intelligence organization, replacing Rohit Prasad with veteran cloud executive Peter DeSantis. As part of the overhaul, Amazon also brought its chip manufacturing and quantum computing research divisions under DeSantis. The AGI division oversees the development of Nova, among other initiatives.
On Tuesday, David Ruan, head of Amazon’s AGI Lab in San Francisco, announced he was leaving the company. The AGI Lab will now report directly to DeSantis.
For Amazon, gaining access to OpenAI’s models will strengthen its AI efforts. There is also potential for further collaboration between the two companies in the future, particularly around agent commerce, which is emerging as the latest frontier of AI disruption potential.
Similar to other companies, walmart, Etsy and Shopify Despite announcing shopping partnerships with OpenAI and other AI platforms, Amazon remained on the sidelines. The company blocked access to sites for dozens of agents, including OpenAI’s ChatGPT, while investing in tools like Rufus.
But in recent months, Jassy has hinted that Amazon may welcome some third-party agents to its site or integrate its tools with AI companies.
“Together we must find a better customer experience and find value exchanges that make sense for both parties,” Jassy said on Amazon’s latest earnings call. “But we’re very hopeful that we’ll get there over time. We continue to have a lot of conversations.”
–CNBC’s Ashley Capoot contributed reporting to this story.
