Amazon.com Inc. is in discussions to make a major investment in OpenAI, the creator of ChatGPT, in a deal that could value the artificial intelligence company at more than $500 billion, according to a source familiar with the matter.
The source said Amazon is considering an investment of around $10 billion, though talks remain ongoing and subject to change. The discussions were described as fluid, reflecting the private and evolving nature of the negotiations.
AI investment race accelerates
The potential deal highlights the AI industry’s escalating demand for computing power, as technology companies race to develop advanced systems that could rival or exceed human-level intelligence.
OpenAI has already secured multi-billion-dollar agreements this year with companies such as Nvidia and Oracle. In November, it also finalized a $38 billion deal with Amazon for cloud computing services.
Despite the surge in investment, some investors remain cautious, watching closely for signs that AI demand could slow or that heavy capital spending may not deliver the expected returns.
OpenAI prepares ground for potential IPO
The talks with Amazon come as OpenAI lays the foundation for a potential initial public offering. Reuters reported in October that an IPO could value the company at as much as $1 trillion.
The discussions underscore OpenAI’s growing flexibility in forming partnerships following its transition away from its non-profit origins and the restructuring of its relationship with Microsoft.
Under the revised arrangement, OpenAI operates as a public benefit corporation controlled by a non-profit entity that retains a financial stake. This structure has eased restrictions on OpenAI’s ability to raise capital and secure large-scale computing resources.
Microsoft role and Amazon’s chip strategy
Microsoft currently holds a 27% stake in OpenAI and has exclusive rights to sell OpenAI’s models to its cloud customers.
Neither Amazon, OpenAI, nor Microsoft immediately responded to requests for comment.
The Information, which first reported the talks, said OpenAI plans to use Amazon’s Trainium chips, positioning them as competitors to chips produced by Nvidia and Google. The report also suggested Amazon’s investment could pave the way for a broader fundraising round involving additional investors.
OpenAI is also exploring the sale of an enterprise version of ChatGPT to Amazon. However, it remains unclear whether the discussions include integrating ChatGPT features—such as shopping tools—into Amazon’s own applications.
