Amazon Reportedly in Talks to Inject $10B+ into OpenAI, With Deal Tied to Its AI Chips

• OpenAI is engaged in preliminary discussions with Amazon (AMZN) for a potential investment exceeding $10 billion, alongside an agreement to utilize Amazon’s custom AI chips, such as the latest Trainium generation.
• This development follows OpenAI’s October restructuring, which enhanced its flexibility to raise capital and partner beyond its longstanding relationship with Microsoft (MSFT), which has invested more than $13 billion since 2019.
• OpenAI has recently committed over $1.4 trillion to infrastructure, including a $38 billion AWS capacity deal last month and a $6.6 billion secondary share sale valuing the company at $500 billion.

The generative artificial intelligence sector continues to draw significant capital as leading companies pursue diversified partnerships to meet rising compute demands. According to The Information, OpenAI is in confidential talks with Amazon (AMZN) over a potential investment exceeding $10 billion, alongside an agreement to use Amazon’s custom AI chips. While preliminary and subject to change, these discussions highlight OpenAI’s strategy to expand its network of collaborators following key structural shifts earlier this year.

Amazon Web Services has developed its own line of AI accelerators, beginning design work around 2015, with the initial Inferentia chips introduced in 2018 and the most recent Trainium generation announced this month. Such hardware is essential for training large-scale models and handling inference at scale, areas where demand has surged. OpenAI’s interest in these chips aligns with its need to secure diverse sources of high-performance computing beyond traditional suppliers.

This development builds on OpenAI’s evolving relationship with Microsoft (MSFT), which has provided more than $13 billion in funding since 2019. An October restructuring removed Microsoft’s prior right of first refusal as OpenAI’s primary compute provider and allowed greater flexibility for third-party collaborations, including product development. The adjustment has enabled OpenAI to pursue wider capital-raising opportunities and infrastructure agreements across the industry.

OpenAI has recently committed over $1.4 trillion to infrastructure projects, encompassing deals with Nvidia (NVDA), Advanced Micro Devices (AMD), and Broadcom (AVGO). Additionally, last month it entered its inaugural contract with Amazon Web Services for $38 billion in cloud capacity, marking a significant expansion into the leading cloud provider’s ecosystem.

In parallel, major technology firms are increasing exposure to multiple frontier AI developers. Amazon has committed at least $8 billion to Anthropic, a direct competitor to OpenAI. Microsoft announced last month an investment of up to $5 billion in Anthropic, while Nvidia committed up to $10 billion in the same entity, illustrating a pattern of cross-investments aimed at mitigating risks and capturing growth in generative AI.

OpenAI’s financial position was further strengthened in October through a $6.6 billion secondary share sale, valuing the company at $500 billion and facilitating liquidity for employees and early stakeholders. These moves underscore the intense capital requirements for advancing AI capabilities, where access to specialized hardware and vast compute resources remains a critical competitive factor. As discussions with Amazon progress, the potential deal could further accelerate OpenAI’s ability to scale operations while enhancing Amazon’s position in the AI hardware and services market.

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