OpenAI In Talks With Amazon About Investment That Could Exceed $10 Billion

OpenAI is in discussions with Amazon about a potential investment and an agreement to use its artificial intelligence chips, CNBC confirmed on Tuesday.

The details are fluid and still subject to change but the investment could exceed $10 billion, according to a person familiar with the matter who asked not to be named because the talks are confidential. The Information first reported on the potential deal.

The discussions come after OpenAI completed a restructuring in October and formally outlined the details of its partnership with Microsoft, giving it more freedom to raise capital and partner with companies across the broader AI ecosystem.

Microsoft has invested more than $13 billion in OpenAI and backed the company since 2019, but it no longer has a right of first refusal to be OpenAI's compute provider, according to an October release. OpenAI can now also develop some products with third parties.

Amazon has invested at least $8 billion into OpenAI rival Anthropic, but the e-commerce giant could be looking to expand its exposure to the booming generative AI market. Microsoft has taken a similar step and announced last month that it will invest up to $5 billion into Anthropic, while Nvidia will invest up to $10 billion in the startup.

Amazon Web Services has been designing its own AI chips since around 2015, and the hardware has become crucial for AI companies that are trying to train models and meet growing demand for compute. AWS announced its Inferentia chips in 2018, and the latest generation of its Trainium chips earlier this month.

OpenAI has made more than $1.4 trillion of infrastructure commitments in recent months, including agreements with chipmakers Nvidia, Advanced Micro Devices and Broadcom. Last month, OpenAI signed a deal to buy $38 billion worth of capacity from AWS, its first contract with the leader in cloud infrastructure leader.

In October, OpenAI finalized a secondary share sale totaling $6.6 billion, allowing current and former employees to sell stock at a $500 billion valuation.

Source: CNBC