Amazon is reportedly in advanced discussions to invest up to $10 billion in OpenAI, a strategic move that would see the prominent AI research lab leveraging the e-commerce giant's proprietary AI chips. This potential deal, first reported by CNBC, could value OpenAI at over $500 billion, according to Bloomberg sources.
The proposed investment underscores Amazon's aggressive push to diversify its stake in the competitive artificial intelligence landscape. The company recently committed $8 billion to Anthropic, a key rival to OpenAI, and has been actively developing its own AI hardware. Earlier this month, Amazon unveiled the latest iteration of its Trainium series of chips and outlined plans for future developments, aiming to bolster its cloud computing offerings through Amazon Web Services (AWS).
News of these talks follows OpenAI's recent transition to a for-profit model, a shift that grants it greater flexibility to forge partnerships and secure investments beyond its long-standing relationship with Microsoft. Microsoft remains one of OpenAI's earliest and most significant backers, holding a 27% stake.
This potential Amazon-OpenAI agreement also highlights a growing trend of "circular deals" within the AI sector. In these arrangements, major hardware manufacturers and cloud service providers invest in burgeoning AI companies, which, in turn, commit to utilizing the investors' data centers and specialized chips for training their advanced AI models.
The AI space has seen several such reciprocal agreements recently. This past March, OpenAI invested $350 million in CoreWeave, a deal that enabled CoreWeave to purchase chips from its own backer, Nvidia. These same chips then provided crucial computing power to OpenAI, boosting CoreWeave's revenue and increasing the value of OpenAI's stake. Then in October, OpenAI signed a deal to pick up a 10% stake in AMD and committed to using the chipmaker's AI GPUs. That same month, it also signed a chip usage agreement with Broadcom. Furthermore, in November, the ChatGPT maker finalized a substantial $38 billion cloud computing deal with Amazon.
Neither Amazon nor OpenAI has yet responded to requests for comment regarding the reported investment discussions.
