OpenAI makes bold AI move with $38b AWS deal

• Willing to make historic bets to lead the AI revolution in a bid to cement its status as a central player in one of the most transformative industries of the decade.
• Amazon is set to deploy advanced Nvidia GB200 and GB300 AI accelerators in custom-built clusters dedicated to supporting OpenAI’s workload.

In a landmark transaction set to reshape the artificial intelligence landscape, OpenAI has signed a seven-year, $38 billion agreement to purchase cloud services from Amazon Web Services (AWS). The deal, which comes on the heels of OpenAI’s high-profile restructuring, marks the company’s most significant bet yet to expand its AI capabilities and operate more independently.

Under the agreement, AWS will provide OpenAI with access to hundreds of thousands of Nvidia’s cutting-edge AI graphics processors—essential for training and running next-generation artificial intelligence models like ChatGPT. The new partnership positions Amazon as a critical infrastructure provider for OpenAI, intensifying competition among cloud giants as they vie for dominance in the booming AI sector.

Massive ambitions

OpenAI CEO Sam Altman has declared ambitions rarely seen in tech, stating plans to commit $1.4 trillion toward developing 30 gigawatts of computing power—enough to supply electricity to roughly 25 million U.S. homes. “Scaling frontier AI requires massive, reliable compute,” Altman said.

“Our partnership with AWS strengthens the broad compute ecosystem that will power this next era and bring advanced AI to everyone.”

The partnership is scheduled to roll out immediately, with all planned capacity coming online by the end of 2026, and further expansion possible in the years that follow. Amazon is set to deploy advanced Nvidia GB200 and GB300 AI accelerators in custom-built clusters dedicated to supporting OpenAI’s workload.

The news sent Amazon shares to record highs, adding nearly $140 billion to the company’s market value as Wall Street celebrated the cloud unit’s growing momentum.

OpenAI’s move is also reshaping relationships among Big Tech rivals. While the company had previously relied heavily on Microsoft for cloud power, recent changes have reduced that exclusivity. OpenAI has now secured cloud arrangements with Google, Oracle, and, as of last week, restructured a $250 billion Azure deal with Microsoft—signaling an industry-wide shift toward multi-cloud strategies.

Financial risks loom

Despite OpenAI’s expected $20 billion annualised revenue run rate by year-end, the company’s colossal cloud expenditures—totaling well over a trillion dollars—have sparked concerns about rising losses and the potential for an AI investment bubble.

Some analysts and investors are questioning how the fast-growing firm will sustainably finance such ambitious commitments as it positions for a possible $1 trillion IPO.