OpenAI Signs $38 Billion Cloud Deal with Amazon to Power AI Expansion
OpenAI has entered into a seven-year, $38 billion cloud computing deal with Amazon, marking its first major move to expand its artificial intelligence infrastructure following a recent company restructuring. The new structure gives the ChatGPT creator greater operational and financial independence as it ramps up AI development.
Announced on Monday, the agreement will grant OpenAI access to hundreds of thousands of Nvidia graphics processors (GPUs) through Amazon Web Services (AWS). These chips will be used to train and operate the company’s growing suite of advanced AI models. The deal highlights the AI sector’s rapidly increasing demand for computing power as developers race to create systems capable of matching or even surpassing human intelligence.
OpenAI’s CEO Sam Altman reaffirmed the company’s ambitious vision, stating that it plans to invest around $1.4 trillion to develop 30 gigawatts of computing capacity, enough energy to power roughly 25 million U.S. homes.
The partnership represents a significant boost for Amazon’s cloud division, AWS, which has faced concerns from investors about losing ground to rivals Microsoft and Google in the competitive AI race. Those concerns eased after Amazon’s strong third-quarter earnings report and this latest collaboration with OpenAI.
Amazon’s stock hit an all-time high on Monday, adding nearly $140 billion to its market value. In contrast, Microsoft shares briefly dipped on the news, reflecting a potential shift in the AI cloud landscape.
Expanding the AI Compute Ecosystem
“Scaling frontier AI requires massive, reliable compute,” said Sam Altman, co-founder and CEO of OpenAI. “Our partnership with AWS strengthens the global compute ecosystem that will power this next era and bring advanced AI to everyone.”
Under the deal, OpenAI will begin using Amazon Web Services immediately. The company expects all planned capacity to be online by the end of 2026, with expansion options available in 2027 and beyond.
Amazon will deploy hundreds of thousands of Nvidia GB200 and GB300 AI accelerators in dedicated data clusters designed to power ChatGPT and future OpenAI models. OpenAI’s models will also remain accessible through Amazon Bedrock, a platform that provides various AI solutions for enterprise users.
Last week’s restructuring also loosened OpenAI’s long-standing ties to Microsoft, removing its exclusive right to supply computing services. The shift signals OpenAI’s strategy to diversify its partnerships and reduce dependency on a single cloud provider.
According to Reuters, OpenAI is also preparing for a potential initial public offering (IPO) that could value the company at up to $1 trillion. However, analysts warn that surging valuations and trillion-dollar spending commitments across the AI industry may be inflating an emerging AI investment bubble.
OpenAI has reportedly expanded its cloud partnerships beyond Amazon and Microsoft, tapping Google and Oracle for additional computing power. The deal with Oracle alone is said to be worth $300 billion over five years.
