Amazon is reportedly considering an investment of around $10 billion in OpenAI. According to Reuters sources, the talks are “very fluid,” but could value the ChatGPT maker at more than $500 billion.
The potential investment builds on a previously agreed deal in which OpenAI purchases $38 billion worth of cloud services from Amazon Web Services (AWS). That agreement, which runs until 2032, gives OpenAI access to Amazon EC2 UltraServers with hundreds of thousands of Nvidia chips.
However, OpenAI is considering using Amazon’s Trainium chips for its workloads, The Information first reported. Every AI player is trying to break free from its dependence on Nvidia, with Google currently holding the best cards with its TPUs as an alternative to GPUs for AI hardware. Amazon’s Arm-based processors have become increasingly relevant since the acquisition of Annapurna Labs in 2015. As Trainium3 and Inferentia demonstrate, Amazon can use such chips to optimize very specifically for GenAI workloads.
Investors are also wary, as Reuters rightly concludes. Any possible sign that demand for AI is declining or that massive spending is not delivering the expected results leads to major stock market fluctuations.
OpenAI diversifies cloud partners
OpenAI has expanded its infrastructure partners in recent months. In addition to Microsoft, which has been its primary cloud provider for many years, the company also relies on Google Cloud and Oracle. CoreWeave also provides infrastructure as a so-called ‘neocloud’, almost entirely focused on AI.
The strategy is clear: reduce dependence on a single supplier and benefit from any surprising advances made by a particular chip manufacturer. Microsoft remains an important partner, even though it does not yet have a relevant AI chip for OpenAI other than purchased Nvidia chips. The tech giant has a 27 percent stake in OpenAI and has the exclusive right to sell OpenAI models to its cloud customers. On the other hand, Microsoft itself has not yet built a leading AI model, only small “SLMs,” a category of models that do not yet seem to be fully developed and suffer greatly from limited precision.
Financing under pressure
OpenAI is struggling with high costs and is in dire need of a cash injection like the one from Amazon. The company spent an estimated $9 billion in 2024 while suffering a $5 billion loss. The infrastructure for training and running AI models remains extremely costly. On top of that, despite its initial lead, OpenAI currently appears to be being outclassed by Google’s offering. Integration with Google Workspace is something that OpenAI has not achieved itself or through Microsoft 365. As a result, it remains an API that companies must connect to themselves, either through a basic ChatGPT subscription or a costly collaboration with an integration specialist. None of these paths are as simple as a Gemini integration into Google’s work suite.
Despite all the doubts, investors remain willing to put in large sums of money. OpenAI already reached a valuation of $500 billion in October after a $6.6 billion share transaction. Earlier this year, it completed a $40 billion financing round led by SoftBank. The valuation would therefore remain the same with an Amazon investment.
OpenAI is also paving the way for an IPO. This would bring the valuation to $1 trillion, Reuters reported in October.