OpenAI and Amazon Sign $38 Billion Deal to Boost AI Computing Power
OpenAI, the company behind ChatGPT, has signed a $38 billion deal with Amazon. This agreement allows OpenAI to use Amazon’s data centres in the United States to run its artificial intelligence systems.
Under the deal, announced on Monday, OpenAI will use “hundreds of thousands” of specialized AI chips made by Nvidia through Amazon Web Services (AWS). These chips will help OpenAI power its AI tools, including ChatGPT, more efficiently. Following the news, Amazon’s shares went up by 4%.
This partnership comes just days after OpenAI changed its relationship with Microsoft. Until earlier this year, Microsoft was OpenAI’s only cloud computing provider.
In addition, regulators in California and Delaware recently approved OpenAI’s plan to create a new business structure. Originally founded as a non-profit, OpenAI wants to operate more like a profit-making company. This new structure will make it easier for OpenAI to raise money and invest in AI development.
Amazon said in a statement, “The rapid growth of AI technology has created huge demand for computing power.” The company added that OpenAI will start using AWS immediately. All of the computing capacity from this deal is expected to be fully in use by the end of 2026, with potential for expansion in 2027 and beyond.
Developing AI requires massive amounts of energy and computer power. OpenAI has said it needs more infrastructure not only to build new AI systems but also to keep its current products, like ChatGPT, running smoothly for hundreds of millions of users.
OpenAI has recently promised to spend more than $1 trillion on AI-related projects. This includes building new data centres with Oracle and SoftBank and signing agreements with chipmakers like Nvidia, AMD, and Broadcom. These deals have caused some investors to worry because OpenAI is not yet profitable. Critics say the company may not be able to pay for all the infrastructure it is getting now, relying instead on future growth and profits.
OpenAI CEO Sam Altman dismissed these concerns, calling them “breathless” speculation. He told a podcast with Microsoft CEO Satya Nadella, “Revenue is growing fast. We are betting that it will continue to grow.”
Amazon is already a main cloud provider for Anthropic, an AI company that competes with OpenAI and is developing its own chatbot called Claude. With OpenAI joining Amazon’s cloud network, Amazon is strengthening its position as a key provider of AI computing power.
This deal marks a significant step for both companies. For OpenAI, it ensures access to large-scale computing resources needed to expand and maintain its AI services. For Amazon, it boosts its role in the fast-growing AI industry and strengthens its cloud business.
As AI continues to grow rapidly, partnerships like this show the increasing importance of powerful computing infrastructure. With the $38 billion deal, OpenAI and Amazon are setting the stage for the next phase of AI innovation, potentially shaping the future of how AI tools are built and used around the world.
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